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The demand and supply of oil
Price of oil affect the world economy
Oil prices and economic effects
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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
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These laws enforcement it makes the company have more expenditure and affect to the profit in operation of company as well (Ebsco, 2015).
Porter’s Five Forces model
Bargaining power of suppliers: moderate level
Occidental petroleum utilize strategy growth by vertical integration that including seeking and integration with conduct to diverse level of companies and its opportunity for the company to increase influence noteworthy on the supplier chain. Moreover, Occidental petroleum has develop capacity on the technology has high efficiency than before.
Competition among the existing players: high level
An industry of oil, the Occidental petroleum corporation has a major competitors is Total S A, Chevron, BP Olc, Exxon Mobil corporation and so on. The oil and gas industry has set up in the worldwide. The competition with these firms is high quality of brand and they utilize 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
... and penalties may apply if they breach the law. This is evident in the case of 24 x 7 Direct Pty Ltd, where the company was penalised with a fine of $8800 for breaching the legislation. Therefore, the role of law reform is fairly effective in protecting the rights of consumer, but it is the consumer’s awareness to register the telemarketer’s number, leading to why it is effective.
...efits from adopting unfair business practices and discouraging competition are much higher than the expected penalty and punishment. With changing time, there is need to make these laws more effective and relevant.
U.S. Government. "2012 World Oil Consumption." Countries. U.S. Energy Information Administration, 2012. Web. 03 Dec. 2013. .
Both the CEO of Exxon, Lee Raymond, and the CEO of Mobil, Lucio Noto, announced that it is because of this reduction in prices and downsizing within the oil industry that the merger is taking place, the very nature of the oil industry was becoming increasingly competitive. The oil industry as whole was becoming more efficient, causing oil prices to fallr. Firms can only maintain their prices equal to or above marginal cost, and if prices are lower than marginal...
In 2004, crude oil producers around the world expected a 1.5% growth in the world’s demand for crude oil. The actual growth rate was more than double the projections at 3.3%. This growth was due to rapidly industrializing of foreign countries such as, China and India. Therefore the lack of crude oil affected the supply of gasoline to consumers at the pump.
According to the website of Oil-Price, today’s value for a barrel can be bought at the price of $41.25 this means that oil is not demanded as much as it used to be over the years, because of the awareness of the environment and also because it is a cyclical phenomenon, there’s no actual reason, but the price will eventually rise again. Since oil is used to produce gas, it would come with surprise if the price of gas is low since the oil cost are also low. Gas prices depend on oil costs and oil costs depend on
In 1970 oil reserves became more scarce, leading to a decrease in production, while consumption continued to grow rapidly (Wright, R. T., & Boorse, D. F. 2011). In order to fill the gap between rising demand and falling supply of oil, the United States became more and more dependent on imported oil, primarily from Arab countries in the Middle East. (Wright, R. T., & Boorse, D. F. 2011). As the U.S and many other countries became highly industrialized nations, they became even more dependent on oil imports. With demand being higher than the actual amount of supply, prices kept rising reaching a peak of $140 a barrel in 2008. (Wright, R. T., & Boorse, D. F. 2011).
There were fierce competitions among the producers that have scale and scope of operations which were similar to each other. For instance, the Pepsi Co. and Coca Cola companies have developed the strategy and infrastructure, which are hard for the local sellers to complete with them. However, there were still many producers including new entrants that try to access the market and compete seriously with low price and differentiation- strategies among rival...
Business must ensure that they are up to date with the current laws and that they
However, by enforcing these rules, the only thing the
In conclusion, the supply and demand of oil is a complex issue that depends on several factors. Geopolitical affairs are the major issues that affect supply and demand of oil. Geopolitical factors include wars, uprisings and political inconsistencies in the world. Other factors that influence the demand and supply of oil include market domains, availability of oil, recession and the world GDP. Since 1859, the price of oil has been inconsistent. Despite the fact that oil prices increased and fell, there has been a considerable rising trend in those prices. In most cases, the falling of the price reaches the previous price level. However, increase of prices goes beyond earlier prices. This trend has seen oil prices rise over the years. With this in mind, it is clear that by 2020 the real price of oil will be more than 200 dollars.
MSCI, a budgetary investigation firm with extraordinary aptitude in surveying the estimation of intangibles like carbon hazard, examined the petroleum business'execution in five key classifications: operations, wellbeing and security; capacity to get to assets in developing markets; carbon discharges; interest in option vitality; and interest in unpredictable fossil powers like oil sands and oil shale, coal bed methane and coal crease gas, and both gas-to-fluid and coal-to-fluid energizes.
Since its discovery back in the year 1858 crude oil has been become one of the most sought after resources on the face of the planet. It is due to this fact that the oil industry has fallen into a rather odd category in the case of globalization and seeking out new markets, new labor and new customers. The reason being that the need for crude oil and fuel is always present therefore the product of oil in its basic sense sells itself and the companies do not have to go out and publicly advertise it in the sense that clothing lines and other commodities do. Oil companies must focus more on the matter of why an individual should buy their oil and along with other alternative fuels over their competitors even though in the end the companies products are the same thing. The company ExxonMobil has been the superior company in the oil industry for quite sometime now, and had plenty of success as individual companies before their merger in 1999. The reason for there success is partially due to the power they wield as the most successful company, leading to many new refineries around the world, making deals with smaller companies to gain access to new markets and are leading the world in alternative fuel research. However these things all come naturally to the biggest oil company in the industry, the real question is how they became the powerhouse they are now. That question can be answered by the way in which the company has not focused in globalizing their product of fuel and oil, but globalizing the image of the company company. This is achieved by focusing on charity in which they donate hundreds of millions of dollars, Foreign Direct Investment in areas in which they wish to expand by attempting to provide these impoverished areas wit...
William O. Douglas said, "Common sense often makes good law." Well that is what laws essentially are, rules and regulations that make sure common sense is followed. One could even say that laws are enforced ethics. Laws serve several roles and functions in business and society, and this paper will discuss those roles and functions.
In order to better assess the competition a business must recognize the difference between markets. It must identify both direct and indirect competition, both present and future. Once competitors are grouped then analyzing their marketing strategies and identifying their areas of vulnerability by examining their strengths and weaknesses would the next logical step. (Deloitte & Touche, 2003) This will help the business determine and distinguish its competitive advantage. The reasoning behind this step is to have clear who the target market is, what the market position is, and knowing exactly what will make the business unique to stand apart from competitors.