Analysis Of The Article ' Hoping For A Price Surge, Oil Companies Keep Wells ' Reserve '

In Beaumont, Texas they had started to drill at around October 27, 1900 and before they started drilling again some of them lost hope because they had been drilling for a long time and didn't find anything. They had been drilling for over two months and drilled down above 1000 feet below the ground. When they had returned from their christmas break they started drilling and they heard a “a noise like a cannon” and natural gas was spraying out of the hole. There was so much oil that it could fill up more than 100,000 barrels a day. Texas has been impacted a lot today because they have so much oil in abundance. That is the reason why their gas prices are low and trading is

As the growth in the shale, oil market is continuously increased the input of oil supplies in the market by 11 per cent, which make an oil price fall cause of overwhelming supply (Meyer,2013).As a result of this, the buyer has more choice to seek a supplier , which has a lower prices and better contract condition. Thus, these forces become a high threat to Afren.

Oil is the product that each and every one of us use. It can be used for fuel, heating and even cooking. The most often known for unstable price is crude oil or gasoline. According to the The Economist, The main reason for price shifts of oil is oversupply. The oil production in Saudi rose 10.3 million barrels per day. This increase is the effect of a new method that I being applied to oil extraction. This method is called fracking, fracking is where they drill into tight-rock formations then gradually turning horizontal for several thousand feet more. This results to accommodations to multiple oil wells. This new approved method of oil harvesting has raised the productivity gains and reduced the cost of harvesting oil.

This eventually affected big companies, which led in decrease in production and fired many employees. The unemployment rose higher than twenty five percent, which meant less money to hover up this economic situation.

The consumption of the oil cause changes in the supply and demand. The United States produces 11 million barrels of oil every day. We are one of the biggest countries to have a big influence on the production and prices of the oil. The basic supply and demand theory explains that the if a product is produced more, the cheaper it should sell. If a country were to double the output of oil day, prices would fall and the Production is high, but the distribution of oil isn’t keeping up with the market. The United States builds an average of one oil refinery per 10 years. This is a net loss due to the fact construction has slowed down since 1970s. Since 1970s, the United States has 8 less oil refineries today. The reason why we are not oversupplied with cheap oil is because of the other countries’ higher net margin and the only operate at 62% of their capacity. Excess capacity is only there to meet future demand. With demand moving accordingly, oil prices will continue to be set mostly by the market — despite external players’ best efforts. (McFarlane)

In Virginia alone about 28,000 jobs will be created such as engineers and oil supply developers. The drilling will affect each state in some way weather it be transportation, stocking, manufacturing or a vast number of jobs. What better way to help American citizens than making national jobs instead of creating foreign jobs.

The article by Spencer Jakab treads the path to explain the effect of drilling rig numbers in North America and its effect on oil prices. Baker Hughes Inc. report shows how the number of rotary oil rigs has been low and crude oil prices have seen a downward trend. Natural Gas has been a different story comparatively with the gas dedicated rig count at its lowest. Along this there’s also a situation building up where due to the surplus gas available there might not be any

Over at the factories they were encountering the same problem, overproduction. Companies had no other choice than to lower the prices in hopes of more purchases.Nonetheless, they would gain less profit. This resulted in workers getting laid off because the profits weren't enough to afford all the workers they once had. Another issue that didn't help the economy was the wealth gap. One percent of the wealth controlled 65 percent of the nation.

-Many workers were laid off, and laid off workers did not have the money to spend (unemployment)

The excessive use of oil in the United States has been a very controversial debate with American experts and scientists. In his article “How America Can Free Itself of Oil-Profitability,” Amory Lovins addresses the many different issues associated with excessive oil consumption and the risks versus the benefits. Amory Lovins is a physicist, environmental scientist, writer, and Chairman/Chief Scientist of the Rocky Mountain Institute. He has written numerous research articles arguing for the use of renewable energy and alternatives for oil. Lovins also regularly gives presentations to other environmentalists discussing the pros and cons of oil consumption. It is clear that his target audience is the demographic of academics, scientists,

The United States consumes more than 25% of the world’s petroleum products which is a large percentage, considering only 3% of the world’s oil reserves are produced by the United States. Given the demand for petroleum products such as gasoline, understanding why Crude oil prices have skyrocketed in recent years, is not hard. According to the article “Ending America’s Oil Addiction,” the surge in crude oil prices can be reduced in large part to the simple concepts of supply and demand. (Cooper, 2008)

Over the past two years, oil prices have increased very rapidly. “With OPEC production cuts and a growth in crude oil demand,” oil prices went from a 25-year low of $11 per barrel in February 1999 to a peak of close to $36 per barrel in December 2003 (Jablon 1). “Some analyst, however, said the cut could soon push crude prices above the psychologically important threshold of $40 per barrel and worsen the pain for U.S. motorists” (“Rising Prices Fuel Gas Clash” 1). During this winter, the price of natural gas has gone through the roof. This brings many questions to mind. Are the companies just raising prices? Is there actually a shortage that is causing the raise in price?

The excessive use of oil in the United States has been a very controversial debate with American experts and scientists. In his article “How America Can Free Itself of Oil-Profitability,” Amory Lovins addresses the many different issues associated with excessive oil consumption and the risks versus the benefits. Amory Lovins is a physicist, environmental scientist, writer, and Chairman/Chief Scientist of the Rocky Mountain Institute. He has written numerous research articles arguing for the use of renewable energy and alternatives for oil. Lovins also regularly gives presentations to other environmentalists discussing the pros and cons of oil consumption. It is clear that his target audience is the demographic of academics, scientists, and well-informed policy makers. In this article, Lovins is not arguing against the consumption of oil but is rather presenting a solution to the issue. This style of writing will attract academics, environmentalists, and even big corporations in the oil industry. It presents useful information that these people can use to their advantage.

Understanding the fact, that falling commodity prices and rising dollar cannot last indefinitely, and maybe even bottomed out for now, I see a lot of perspectives within these markets in one year period. Moreover, a lot of forecasters expect inflation to move toward two percent goal during this year, which will result in substantial rise in commodity prices. Although, it is a controversial issue according to the FED projections for the current and the next year, which have been lowered from previous numbers (Table#1).

According to Domm (2013), the author of the first article, apart from the unrest in Egypt, several other factors such as a plunge in the inventories of domestic crude oil could drive up demand and in the end trigger an increase in the price of gas. In the opinion of the author, although the problems facing Egypt (and Libya) have affected supply