A Strategy Behind The Oil Price

Long-term: Low profits cannot be maintained for so much time. In some time in the near future, Opec will have to drive the oil price up in order to regain losses.

This is a ratio that outlines how much the dividend payout relates to the firm’s share price. In markets like Kenya where capital gains tax has not been in operation the dividend yield is generally similar to the returns on investments of a firm’s stock.

Exxon and Chevron are no doubt some of the leading incorporated oil companies on the globe. Exxon Corp. is the second largest oil firm after Royal Dutch Shell, it is respected for getting the biggest revenue return in 2008 which no company in the U.S. have ever reported before. According to Wilson (2009) Chevron has managed to show a lot of profitability in the market despite the decease in its oil production. It graded as one of firms which made a billion dollars profit within a week in the period of July to September 2008. Regardless of profitability trends set by the two oil firms in the U.S. market, they have been facing financial decline like the rest of the companies in other industries. The two firms are like two sailing ships which are taking longer time to sink. In the last few years, the production capacity of Chevron and Exxon has decreased and their listings on the stock market have become weak. The continuation of construction and drilling which requires billions of dollars in expense of oil production might make them experience a bigger financial crisis (Wilson, 2009).

The primary reason behind the decrease in Exxon’s stock price is the change in oil prices.

Also, the dividend yield is a very important measure of profitability to investors. The dividend yield measure shows the rate of return to common stockholders in terms of cash dividends.

Does the stock market appear to reward high-dividend payout? What about low-dividend payout? Does it matter what type of investor owns the shares? What is the impact on share price of dividend policy?

The factors that determined the dividend policy of firms were governed by the way firms could catch up from the crisis. The number of firms that resorted to dividend payout was dangerously low, but in 2011 the firms earnings having rebounded there have been nearly 1000 cases of increases and only 84 cases of decreases in firms which have started paying dividends . S&P 500 firms were seen to have paid approximately $200 billion in 2010 and the dividends to earnings pay out continues to remain very low .

rate changes depending on the change of earnings, the fluctuation of dividend will increase. This

Since 2014 crude oil prices fell dramatically by 50% to around $50 US a barrel. This significant price reduction is largely due to a global oversupply of oil and to a lesser degree a reduced demand for oil.

Although the general stock prices fell sharply, we help up quite well with our shares falling 9% within a 6-month period compared to 30%. At the time, Rex Tillerson stated that our financial strength continued to support our disciplined capital investment approach during the economic slowdown. Analysts credited us for having a shrewd, possibly controversial, management style in order to avoid excessive spending on projects in order to find and develop oil while prices were high.

Also, when the demands for dividends increase, cash flow for the company can be prevented. The chances of the company reinvesting profits in their future growth are also minimized in the process. This can strain the future payment of dividends easily if the company gets to face challenges. Like in the Linear company scenario, if they don’t interfere with the provision of dividends, they might be affected in the future. The ideas on providing dividends tend to vary when challenges come in; that is why the companies are always recommended to discuss and critically analyze their position before making such major decisions. Dividends also prove to be a blunt instrument for a reward. This is because dividends are rewarded to you regardless of whether you fully or partially depend on it. While it is non-discriminatory, the

A number of theories have emerged as to why the price of oil has taken a severe plummet since its peak in June 2014. The price of crude oil was around $115 a barrel at in June 2014. By 2015, it had fallen by more than 40% to below $70 a barrel. (Petroff) There has been exhausting speculation over this matter including reasons relating to geopolitics, natural disasters, economic trends and the lack of regulation by the Organization of Petroleum Exporting Countries (OPEC). OPEC is the vicar of oil pricing, but has clearly contributed to the drastic price drop in the past year. The standard of OPEC is to ensure balance in the oil markets in order to secure a proficiently economic and steady supply of petroleum to consumers. (OPEC) In November 2014, OPEC failed to reach an agreement on setting a standard of how much petroleum each OPEC nation could produce, which essentially drove down the price of oil. If all of the countries in OPEC are not mandated to supply a fixed amount of oil, they will produce enough to drive down the price making it comfortable for consumers and importers to buy. This has been part of the issue since the plunge began. This de-regulation creates competition because each oil-producing country wants to set the most profitable price, which requires oil production exceeding the typical OPEC standard. The plummeting prices of oil have created positive and negative effects in different industries. The transportation and industrial industry experience lower

A dividend tax is an income tax paid on the earnings from a corporation that is distributed to its shareholders. Dividend payments are treated as ordinary income, and they are taxed as if the taxpayer had earned income through active work. Presently, there is much controversy surrounding dividend tax. The government taxes dividends twice: It first taxes corporate income, then taxes the same income again when shareholders receive dividends paid out of corporate income. The double taxation raises the questions of whether the tax should be eliminated, and which taxes should be cut.

There are two main reasons for falling oil prices - weak demand in many countries due to unexciting economic growth coupled with flowing US production.

As the price of Oil & Gas is dropping, Oil & Gas companies and operators are increasingly