The Impact Of The Petroleum Industry

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Couple years ago, oil prices dropped around fifty percent, at the high of $115 a barrel in June 2014 to a low $57 earlier this year in January. (Rich, 2017, para 1.) The price fell because of the slow world economy, leading to less demand for oil than what was predicted. OPEC, which stands for Organization of the Petroleum Exporting Countries made more than expected. Then the fast growth of the U.S. the shale produced from the hundred dollar plus a barrel phase. With the technology of shale, which is a process extracts oil from hard rocks the US has the largest reserve with 264 billion barrels (Matthews, 2016, para 4)
Organization of the Petroleum Exporting Countries has competition with the United States shale industry, so they are
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The average household spends 6% of their income on fuel related transactions and are saving thousands of dollars annually. (Cardwell & Schwartz, 2015, para. 14) The country is currently enjoying the low cost of fuel, but we are also putting ourselves at risk with possibly having to pay more in the future and a slower economy. Both refineries and producers of oil companies are prepared to cut jobs overall spending which also called capital. If that is needed that will help coup the company’s revenue. If the large oil corporations go out of business that would hurt the overall economy in the future. Also think about shale companies that are hurting and failing to come up with new ideas that will help with making things go fast and flawless and continue to function at the fifty-five dollar per barrel. This would raise a lot of red flags and harm the economy with people getting cut from their jobs, dependency on oil import and instability on gas prices. Something to think about that would help is to consent the higher prices tag short term, as the US inclines up to meet the national demand. Then the government will offer incentives for innovative ideas, production and different was to source gas, such as solar panels to heat up the house, and electric cars. The end result of eliminating the depend ship of imported oil form Organization of the Petroleum Exporting
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