Standard Oil Rise and Fall

John D. Rockefeller started the first Standard oil-refining company in 1870. He started in the oil business in 1863, investing in a oil company in Cleveland,Ohio. John D. Rockefeller was born on July 8, 1839, in Richmond, New York. Growing up, John would sell candy and other things to make money. At the age of 14, John and his family would move to Cleveland, Ohio.

With reference to the levels and spheres of corporate power discussed in the chapter, Rockefeller and the powers of Standard Oil had impacts to the society economically, technologically, politically, and culturally. When Rockefeller was young, he found an investment that would change him for the rest of his life. The Cleveland petroleum refinery in which he invested $4,000 in 1863, was still in its beginning stages. However, Rockefeller was devoted to the oil business, soon becoming one the most successful men in history. Economic power is the ability of the corporation to influence events, activities, and people by the virtue of control over resources, particularly property. The power of Standard Oil changed society by leading the economy to economic growth. The Standard Oil business had built facilities and employed workers. In turn, this had also increased the economy to a fuel related industry. As Rockefeller had expanded the business of his company, Standard Oil also improved and perfected their oil refined technology. In terms of a deeper level of the power, the Standard Oil business sparked the development in other industries, such as the automobile industry. The textbook states, “However, just as electric lightbulbs were replacing oil lamps, the

Another factor in oil price is the cost of extracting crude. As the extraction of oil has become more difficult, oil’s historically high ratio of Energy Returned on Energy Invested has seen a significant decline. The increased price of oil makes non-conventional sources of oil retrieval more attractive.

In order to keep up with demand, the United States has been forced to rely on importing 80% of its crude oil. This niche was filled from the creation of OPEC who uses price gouges to create an economic boom in their country, through unifying and controlling the industry. This economic boom produced by OPEC amounts to an annual 730 billion (U.S.) dollars. In order to fully understand the magnitude of power this organization has, we can compare their annual income to every country 's GDP. After doing this we notice that OPEC would be the 20th wealthiest nation trumping 167 countries in the process. This fact is mind boggling because when we talk about GDP we are talking about the value of all the finished goods and services produced within a country. When we talk about OPEC we are talking about a single product which is crude oil. This is worrisome for many reasons, first and foremost being that countries who are not members of the organization don 't want one organization controlling and monopolizing such a valuable resource.

The scarcity of oil offering but, together with the increased global demand, certainly play their part to the recent price increases on world markets. Only recently climbed the price of a barrel of crude oil to over 100 U.S. dollars, an increase to 120 dollars per barrel no longer seems excluded. The price of oil to the U.S. gas stations since 2004 is even more than double.

ExxonMobil and other companies in the retail oil industry are working in monopolistic competitive market. The market demand in oil industry is inelastic in short run and all the companies have their own share in oil demand. In the monopolistic competition like in the case of ExxonMobil and other retail oil companies, prices are usually set by the forces of demand and supply prevail in the market. However, companies in this situation usually try to gain maximum profits and they also want that

Increase in production of unconventional oil-unconventional oil is petroleum extracted using other techniques than the conventional oil well. Many governments across the world are investing a lot in the production of these oils thus flooding the oil market with unconventional oils thus reducing the price of conventional oil.

While Edwin Drake focused on drilling oil wells in order to find oil, John Rockefeller thereafter focused on the refining of oil because it is through the refining of oil that it becomes fit for various purposes of practise. This was a step in the advancement of the oil and gas industry since it was this type of thinking that lead to the more commercially viable usage of oil. Before the creation of the Standard Oil Trust by Rockefeller, oil was mainly used for lamps and lubrication however, soon after oil was necessary for advanced inventions such as ships, airplanes and automobiles. For example, ships and trains were previously reliant on coal but were then switched to running on oil; this was a positive switch due to the fact that coal is the energy source which emits the most CO2. Hence, oil followed by natural gas became the most sought after and most imperative source of energy globally.

The price of Oil has inflated over the years as the fossil fuel is slowly running out, there has been a rise in prices as supply falls. When a commodity becomes scarce its price will rise. The price has also risen as demand has increased from countries like China who are producing more goods which are demanded by consumers.

After moving lower in 2001, crude oil prices moved higher in 2002 reaching over $30 per barrel in September 2002. Higher prices were supported by a number of factors. One was the ongoing U.S. war on terrorism and rising tensions with Iraq. There was the likely potential that military action would be taken against Iraq that would disrupt the supply of crude oil to the market. With that issue still not settled as 2002 drew to a close, crude oil prices continued to find support.

This is why prices began to decrease. In December 2014 the price went down to $55.48 per barrel.

A monopoly is evident where a firm is the sole seller of its product and if its product does not have close substitutes, as discussed in (Gans J., King S. Mankiw A. 2003). This essay will discuss the monopoly of petroleum by The Organization Of Petroleum Exporting Countries (OPEC), particularly how it controls the price of petrol, threats to its monopoly and the social costs involved.

company spent 3 years looking for oil in vain. At that time, "Texaco - Texas Oil" company got its golden chance

Smaller companies tend to do better. Managers in smaller companies know the costs and therefore can take better and faster decisions.

In the real world it would be impossible to imagine a monopoly pertaining to anyone sector or industry, at best there can be influential firms. Standard Oil, however was the exception to that it is exemplary of the word monopoly. This section will provide a brief history of Standard Oil and the monopoly it had over US oil.