Essay about The Causes Of Decline Of World Oil Prices

Essay about The Causes Of Decline Of World Oil Prices

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Economist has analyzed the causes of decline in world oil prices. Typically, the price of oil is determined by demand and supply of the world market and forecast advance to invest in which level of demand depends on the level of economic activity and behavioral use of energy from humans. The oil price decline has a benefit for oil importers like China, India, Japan, Europe but unfortunately for oil exporters such as: Kuwait, Venezuela, Nigeria, and Iraq. Crude oil prices fell steadily in the past seems to be a result of two main factors being the levels of demand declining and a level of increased supplies (Economic, 2015)

Social
In 2015, international energy agency estimated the average quantity of demand of oil over the years is ninety million barrels and the use of daily fluid fuel used all around the world (international energy agency). Recently, oil prices dropped, which had a good result for the consumer because this enabled the consumers to save money on fuel costs for their vehicles and with their savings. The Business Sector has benefited from the drop in oil prices as well because the cost of goods falling from freight, which gives business a power on the produce goods more than ever and helps businesses more profitable (Andrew Tipping, 2015)

Technology
Occidental corporation uses modern technology to increase on the production of oil and natural gas in an effective and secure manner. Companies put money to invest in machinery and modern devices on exploration oil wells. (OXY, 2015)

Environmental
Since 1985, average temperatures in the United States have increased by 1.3 degrees to 1.9 degrees, which is a cause from car and industry emission carbon dioxide to the atmosphere (National Climate Assessment, 2015). The cl...


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...ze a wide range of strategies differently into their operations for create advantage on competition for their business. The firms has set up their brands that accepted across the globe and the most customer that is make oil and gas industry has a competition quite high.
Bargaining power of buyers: moderate level

In the economy oil and gas are fundamental products for business and people need to use it every day. In developed countries the agencies of the government will control the oil supply. In addition, the feature of oil industry looks like the firms deal, their business or joint business together in format cartels because it 'll help them have the power to control the price of oil in the market that they wish. Moreover, the most of the purchasers of oil products purchase in large volume and when they lose the customer it might impact to their income of company.

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