Essay about JWI515 Week 5 Assignment 2

Michael Porter wrote about five forces affecting the profitability and viability of companies. The five forces are existing competitors, new entries into the market, substitute products, bargaining power of customers, and the bargaining power of suppliers. (quickmba)

Oil suppliers dig deep down to the roots to analyze and derive concrete solutions to carry on the rising market. The force of fracking in the United States is lifting the economy; the system has been a political game changer for the nation, creating job opportunities and investing money into the community. The United States is currently capable of competing with the global marketplaces at a high rate. This coordination leads to knowledge for on-shoring manufacturing, which eliminates the dependency on foreign oil. This significant groundwork is driving opportunities for innovators. The abundant supply of oil and the inexpensive cost leads to cheaper energy for consumers (Dews, 2015). Along with the low price for refineries,

Since June 2014, oil price has fallen by more than 70 percent. Price has recovered few times last year. However, it has sunk this year to levels not seen since 2003 (New York Times, 2016). This drop of price has affected several firms in the industry which we can mention Chesapeake (CHK). In fact, Chesapeake was quoted at more than $20 until late 2014. Today, it is priced below $5. The oil industry is known for its history of booms and busts. It is not the first time that this industry is shaken. In the 1985-86, supply-driven mainly caused the fall of prices. In 2008-2009, price fallen was entirely due to the collapse in demand. However, this reason behind this recent crisis is a little bit special: “price decline appears

As a result, LMIC administered a special survey to collect information specific to oil and gas activity focused on employment tied to well-pad operations, and supplemented it with data from established sources. The figures published in this report provide a detailed view of North Dakota's oil and gas sector at the State, county, and city levels. This report only examines employment designated as necessary for the extraction of oil and gas, and does not include ancillary employment (e.g. related to food, housing, health care, government,

pioneering movements and emerging technologies in this industry [2, 3]. However, the oil industry, with

Crude oil- plays an important role in the production of energy and united states consume more energy from petroleum than from any other sources. In 2014, 19 million barrels of petroleum was consumed by total U.S. i.e., 35% of all the energy consumed in the United States. Increase in population, industrialization and demand for energy, oil is diminishing at a faster rate each year. Therefore, it would cause a fossil fuel supply limitation with large economic impact, and the environment problems are both driving forces for actions towards a more sustainable energy system. In addition, scientists at the Energy Department’s National Labs are developing technologies to reduce

Shale revolution started about ten years ago due to technological developments such horizontal drilling and hydraulic fracturing. The increasing exploitation of shale oil significantly affected the oil market. In this report, WTI oil price was predicted over the next five years using historical data. A discussion of major factors that historically affected oil prices is presented. Historical events were linked to current and expected future events to evaluate the predicted prices. To further evaluate the forecasted prices, they were compared to the predicted prices by the Economy Forecast Agency.

Within no doubt that oil and gas are the most vital components of our daily life, this industry is currently experiencing its transformative periods. There are a lot of changes that would bring both opportunity and threat to oil and gas industry in the future. The oil and gas market showed a not optimistic trend during the past year, according to England (2015), during 2015, the overall cash flow keep diminishing and the situation also become weaker than before. The main competitors of Exxon Mobil Corporation are Royal Dutch Shell, Chevron Corporation and BP.

The oil and gas industry has turned into the heart of the worldwide vitality business sector and dominant part of the general public utilize these vitality in high sum.

Petroleum engineering has always provided the world 's economy with numerous jobs until recently where it has seen barrels of oil for less than 35 dollars. This is not the first time the oil and gas industry has been in a down turn, and it will probably not be the last. However, petroleum engineers are problem solvers and with the many different specialized branches of petroleum engineers this setback is another problem to be solved.

The five competitive forces that shape strategy are, (1) Threat of New Entrants, (2) Threat of substitutes, (3) Bargaining Power of Suppliers (4) Bargaining Power of Buyers, and (5) Rivalry among Competitors. Those considered rivalry have measurable factors that rank each force as “Low, “Medium or “High” strength. The combined strength of the five forces determines how appealing the industry is to possible threats. The five forces are briefly defined below.

The oil and gas industry is important in the sense that it plays an important role in shaping the future of many economies around the world. A quick analysis of the financial statements of the five super-majors (BP, ConocoPhillips, ExxonMobil, Shel ) shows that plant, property and equipment on average accounts for 51% of total assets. [1]

The fall in oil prices in 2014 is a part of the volatility that the oil and gas sector normally face. This has caused a critical selection on investment decisions as well has keeping track on cost so as not to bring about an unwanted increase.

The price of natural gas and oil have fluctuated widely because of some factors without Total control, these factor are: Supply and demand for global regional and economic and political development in the global and regional resources producing regions, especially In the Middle East, Africa and South America also the ability of OPEC and producing countries to control and influence the level of production and prices and other thing which is effect on the price which is the cost and availability of new technology also the price of non-conventional energy and economic condition and the global financial market and the last one is changes in demographics, including population growth rate, and consumer preferences. Significant reductions in prices or extend the oil and natural gas, which would adversely affect the results reducing their profit for the year 2014.

Gas and oil development plans are branded by huge capital investments. Exploration and production operations incorporate numerous activities, reaching from undertaking geological surveys, finding hydrocarbon resources, and commercially exploiting them. Projects in this area are of a high risk nature in physical trading, and political sense as it is hard to know in advance the presence, degree and value of hydrocarbon resources, as well as production costs and the price oil of oil in the global world market Kaiser, Mark .J (2007)