Oil Industry - Essay Example

Only on StudentShare

Extract of sample
Oil Industry

The factors that lead to affect the demand for oil include the cyclical demand, the prices of the substitutes, changes in climate and the market speculation. When there is an increase in the prices of oil the demand remains constant. A very large change in the price of oil leads to a very minute impact on the demand and therefore the short-term demand curve is shown like this:
The supply of the conventional oil is relatively inelastic. This is so because the actual total cost of pumping the marginal barrel of the oil is comparatively low, once all capital expenses of building and prospecting an oil rig has been established. The oilfield will always cost the same roughly to operate whether producing at full capacity or at 50 percent capacity but in most cases the producers try their best to produce at the maximum sustainable rate. The short-run supply of oil is affected by the profit motive, spare capacity, stocks available for the immediate supply especially from the oil refineries and the external shocks (Zucchetto, 2006, p.45). ...
Download paper


Organization of the Petroleum Exporting Countries (OPEC) is a cartel aimed at coordinating and unifying the petroleum policies that govern the member countries in ensuring stabilization of the markets of the oil so that they secure an economic, efficient and a constant supply of the petroleum to the consumers, a stable income to the producers and a good return on capital to the ones investing in petroleum industry (The Economist Newspaper Ltd, 2004, pp.8378-8381).
Author : qmarvin

Related Essays

Health and Safety Issues in the Oil and Gas Industry
This study focuses on the different health and safety issues in one of the riskiest industries, considering the business operations it involves. The oil and gas industry undergoes numerous processes that include the use of different chemicals (Cottle and Guidotti, 1990). Such processes are potentially hazardous not just to its employees but also to the environment. For the past years, the oil and gas industry has received wide-ranged criticisms regarding its negative effects on the global atmosphere (Young, 2003). These effects on both humans and the environment are the subjects of this...
5 pages (1255 words) Essay
Article Analysis on the Oil Industry
The writer mentions, "Today, despite astonishing advances in exploration and production technology, the industry is finding just 12 billion new barrels of oil each year - less than half of what we use. This is one reason that oil prices, which had averaged $20 a barrel since the 1970s, have been hovering at $30 for nearly a year." (Roberts, 2003) These facts and figures are important for an article such as this as it can well be mentioned that these are the basic strong points of the article. However, there are no further analyses of the future developments in the oil industry in relation to...
2 pages (502 words) Book Report/Review
Oil and Energy Industry in UAE
m.) respectively and hence world's fifth and fourth largest respectively (Khalil 2009). UAE is OPEC's third largest oil producer and currently pumps 2.4 million b/d (Khalil). UAE projects to enhance upstream as well as downstream production capacities (Energy Information Administration 2007).
7 pages (1757 words) Essay
Strategy Development in the Global Oil, Gas and Petrochemical Industry
However, with the passage of time, the company realised that they had to compete with other companies in the global arena. Oil companies such as Exxon were giving Shell a run for their money because they were globally managed. In order to respond to this trend, the company opted to change its corporate governance style. They opted to control almost all their downstream sectors through their headquarters in London and The Hague. (Shell, 2008)
15 pages (3765 words) Essay
Job Satisfaction in the Oil, Gas, Energy and Industry Sectors
In this context, job satisfaction becomes an important human resource management strategy that would ensure the petroleum industry of its human resource needs. Job satisfaction refers to the perceptions and feelings of the employees about the different aspects of their work. Human resources form part of the investment of companies particularly those that require high levels of knowledge and skills from employees like in the petroleum industry.
88 pages (22088 words) Essay
Oil Industry Essay
Both the upstream and the midstream sectors are concentrated only in certain parts of the world such as Russia or the Middle East while the distribution industry which is part of the downstream sector is spread throughout the world (Gary & Handwerk, 1994). Therefore, any changes in the global market of oil can either favorable or adversely affect the distribution industry significantly. The unpredictability of the global market can also lead to many changes inside of the distribution industry, and the rising cost of fuel has only put strain on the already straining oil distribution...
2 pages (502 words) Essay
Got a tricky question? Receive an answer from students like you! Try us!