Chinua Crude Prices And Its Implications On India

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.

The U.S. was supposed to be the world’s new swing oil producer, able to nimbly open and close the taps in response to market forces, thanks to its bounty of shale fields.” In the past a barrel of oil has been one hundred dollars, recently it has dropped to thirty dollars. Though some wells can be profitable at low prices it puts a serious strain on the oil industry as explained in this article.

This report will consist of the causes and consequences of the changing price of WTI crude oil and recent trends in the global price of oil. It will also include the effects of the ever-changing price of oil on individuals, business firms, governments and the economy.

Oil prices hike or drop is normally a major concern to researchers, industries as well as the government. Oil majorly affects the operations of all sectors of economy in any nation. From analysis and monitoring of oil prices, it has been observed that oil prices went down from the second half of 2014. This was unexpected because oil prices had stabilized for about four years with each barrel costing 105 US Dollars (Miller 11). According to a research and simulation done by researchers in 2014, there was a prediction speculating oil prices would remain low in 2015 and marginally rise in 2016. However, in 2015 there has been a very sharp decline of oil prices. It is out of this concern that this papers the aims at addressing the following questions.

Until the above said period, the OPEC countries were the main producers of the natural oil and they worked as the cartel and they determined the quantity to be produced based on the market demand and they kept the price at a higher rate and prevented the fall of the price by reducing the production of oil. The introduction of the shale oil made the problem. The higher demand and lower supply of

Saudi Arabia is in possession of vast quantities of crude oil, currently larger than the US. [2] Due to the ease of access for Saudi Arabia to extract their oil, they have much lower production costs, giving them the flexibility to sell their oil at much lower prices. [3] This has forced many international oil companies to match these low prices to stay competitive. As other companies are not able to produce oil at such low prices they are forced into smaller profits, making extraction more costly. [4]

Specific Purpose: To inform the audience the major effects that is caused by the drop in oil prices. Introduction: Attention: 250,000 people lost their jobs since last year. More specifically 250,000 people who worked in the oil industry have lost their jobs.

In 2014 the Organization of Petroleum Exporting Countries, or OPEC decided to lower the oil price. The reason the OPEC nations decided to overproduce and flood the market was to strangle the oil industry of the United States. This low price would force the oil businesses to lower their prices to compete and therefore income would be reduced. The OPEC nations would have a majority of control over the oil market if the US oil industry fades or is driven out of business. The OPEC nations, whose primary income is from petroleum, are fighting for more income from the US based

As most of the world knows oil prices have been plunging downwards since June 2014, in which a barrel of oil has fallen more than 70 percent from that time, was $90- $100 a barrel, now $40 a barrel and approaching $30 a barrel. This fall basically came about due to rapid increase in global oil production which started to exceed its global demand therefore forcing prices down. “Earnings are down for companies that made record profits in recent years, leading them to decommission more than two-thirds of their rigs and sharply cut investment in exploration and production. Scores of companies have gone bankrupt and an estimated 250,000 oil workers have lost their jobs.” (Krauss, 2016).

Beginning June 2014, the price of West Texas Intermediate (WTI) crude has dropped from $105 per barrel to where it is now currently priced at $42 per barrel on November 2015, constituting a price decrease of more than 60% over a period of eighteen months. This price drop is due to an increase in oil production primarily coming from Saudi Arabia and Iraq along with the American shale plays that is causing an outward shift in the global supply of crude oil. With the short term demand for oil being inelastic, a moderate increase in supply will cause a large decrease in the market price. Basic intuition of an oil producing firm with enough market power to face a downward sloping demand schedule, OPEC, would have it so production is scaled back in order to drive prices back up to former levels, however, this is not the case of what happened. OPEC, along with its lead producing country, Saudi Arabia, has been producing at their maximum production capacity in order to saturate the market as much as possible and drive oil prices down even lower.

The sector of society will display disappointed when it finally reach the end conventional oil, especially in food population. In order to produce the amount of food needed to feed the population, it takes more cost. The transport sector will also be strongly affected due to high oil prices at the end of conventional oil era.

The low price of oil can be directly felt when filling up a car’s tank with gas. For many years when the price of oil drops, there is growth within the economy, however, the recent decline has yet to deliver the traditional economic boom. Low oil prices have a negative impact on the U.S. economy as well as the global economy, with a direct correlation to politics. The low prices affect the U.S. economy in many ways. Cheap oil halts growth in businesses and makes companies less profitable. These actions will have ripple effects throughout the U.S. as a whole. There are small segments of business that will be more successful when oil is so inexpensive but the negatives far outweigh the positives.

There are multiple countries sabotaging all of the world’s oil prices. This means there are multiple conspiracies to why the oil energy is

As the narrative commonly begins, oil prices are way down. Way way down. In fact, since June 2014, the price of a barrel of oil has been cut in half reaching levels last seen during the bottom of the 2009 recession. The causes of such rapid declines are best attributed to a simple supply and demand model. On the supply side, domestic oil production has doubled in the last six years. As the world’s largest crude oil consumer in the world, the US was once a large and reliable buyer of foreign oil. But with domestic demand for foreign oil waning, exporting countries such as Saudi Arabia, Nigeria, and Algeria have had to find new

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)