Studentshare
Subjects
Business
Consequences for domestic oil & gas companies resulting from the recent crash in oil prices

Consequences for domestic oil & gas companies resulting from the recent crash in oil prices - Research Paper Example

Add to wishlist

Summary

There has been a steady drop in oil prices orchestrated by a number of factors including the increased production of oil in the United States, weak China demand, and determination by OPEC (mainly Saudi Arabia) not to reduce production1. The fall in oil prices affects the United…

Download full paper File format: .doc, available for editing

GRAB THE BEST PAPER95.4% of users find it useful

Consequences for domestic oil & gas companies resulting from the recent crash in oil prices

Read Text Preview

Subject: Business
Type: Research Paper
Level: Masters
Pages: 5 (1250 words)
Downloads: 3
Author: elmohodkiewicz

Extract of sample "Consequences for domestic oil & gas companies resulting from the recent crash in oil prices"

Download file to see previous pages

According to Baker Hughes, there was a reduction of energy industry oil rigs by 16 rigs in the week ending December 23, 2014 with 26 more rigs reduced in the week ending January 2, 20153. The decline in the rig count is evidenced by the chart below. The other impact on the US oil and gas companies is a reduction in drilling of new wells with a fall of 40% in issuance of new permits for oil production in the United States in November in response to fall in oil prices. Hemerich & Payne, an energy exploration and production company based in Tulsa, reduced its oil rigs by 50 in January in response to the low oil prices after a previously reducing its oil rigs by 11 rigs.

The other impact of the declined oil prices on US oil and gas companies is a reduction in share prices. US shale producer’s shares fell by 8.4% on January 5, 2015. The fall in oil prices resulted in the fall of share value of Continentals resources by 12%4. Transocean’s shares declined by 7% making it a 65% fall in stock for the company within the last one year5. Rigs witnessing low production have also been shut to allow the company’s to concentrate on more productive rigs. The fall in oil prices also resulted in the layoff of workers in the oil and gas sector.

Schlumberger (SLB) stated low oil prices and few wells being drilled as reasons for dismissal of 9,000 workers6. A total of 53,041 jobs were lost in January in the United States with 40% of the job cuts being directed related to the fall in oil prices7. Of the 53,041 jobs lost, a high percentage was lost from the energy sector with 21,322 jobs attributed to oil price cut. Halliburton and ConocoPhilips announced 0.42% (1000 workers) and 0.75% job cuts in January respectively, because of the reduced prices of oil.

In Texas, 19, 833 people lost their jobs with the main reason being the fall in oil prices while Baker Hughes reduced its workforce by 7,000 workers. The fall in oil prices has also affected economies that were booming

...Download file to see next pages Read More

Cite this document

APA
MLA
CHICAGO

(“Consequences for domestic oil & gas companies resulting from the Research Paper”, n.d.)
Consequences for domestic oil & gas companies resulting from the Research Paper. Retrieved from https://studentshare.org/business/1682238-consequences-for-domestic-oil-gas-companies-resulting-from-the-recent-crash-in-oil-prices

(Consequences for Domestic Oil & Gas Companies Resulting from the Research Paper)
Consequences for Domestic Oil & Gas Companies Resulting from the Research Paper. https://studentshare.org/business/1682238-consequences-for-domestic-oil-gas-companies-resulting-from-the-recent-crash-in-oil-prices.

“Consequences for Domestic Oil & Gas Companies Resulting from the Research Paper”, n.d. https://studentshare.org/business/1682238-consequences-for-domestic-oil-gas-companies-resulting-from-the-recent-crash-in-oil-prices.

Cited: 0 times

CHECK THESE SAMPLES OF Consequences for domestic oil & gas companies resulting from the recent crash in oil prices

Debate the merits and problems of oil nationalisation for Iran

The main body of the paper is characterized by an adequate description of the turbulent nationalization of the oil industry in Iran, This is followed by a detailed outline that Iran stood to actually gain from the Nationalization of its oil industry as well as the eventual demerits of the country's oil nationalization program.... Debate on the Merits and Problems of oil Nationalization in Iran (Name) (Institution) (Course) (Tutor) (Date) Introduction Thesis Statement The process of oil nationalization in Iran was initially acclaimed by several factions within the country as theoretically being of immense benefit to the country....

18 Pages (4500 words) Essay

Consequences of a Fall in the Global Price of Oil

The fall in oil prices may cause some producers who were already finding it difficult to cover their costs to go out of business or shift to the production of other commodities, this means that BP will now have a lower number of competitors in the market and will face a lower competition than in the past.... The paper “Consequences of a Fall in the Global Price of Oil” predicts the likely transformation of the infrastructure of the oil products market and the US economy: a decrease in oil supplies, while increasing demand; a rise of consumption expenditure, net exports, and GDP, a fall inflation rate....

6 Pages (1500 words) Coursework

Rising of Oil Prices

In view of the critical importance of oil for the economies of the countries of the world, any rise in the ballooning oil prices may lead to a worldwide slowdown and depression.... hellip; The conclusion from this study states that geopolitics and economic necessities have been dictating the oil prices for a long time.... This conflict of interest has resulted in what we are witnessing today: cartelization of the oil industry, soaring oil prices, weakening the dollar, rising inflation and worst of all, war/threat of further wars in West Asia - the major oil-producing region of the world....

3 Pages (750 words) Essay

Oil and gas correlation

he economic recovery from 1980s in the US and the world at large was accompanied by rise in oil prices.... It is also worth to note that the global oil prices are volatile in regard to world market trends, Middle East socio-economic issues and OPEC whims.... Mitigating Vulnerability to High and Volatile oil prices: Power Sector Experience in Latin America and the Caribbean.... In the early 1970s, economic reports indicates that there was a positive trend in their prices but this has… One of the observed reasoned for the negative correlation between these two important resources can be attributed to socio, economic and political dynamics experienced across the Oil and Gas correlation Oil and natural gas demand are basically expected to correlate due to their significant equal role in production of energy for industrialization and domestic consumption....

1 Pages (250 words) Essay

In What Ways Has the Economy of Azerbaijan Been Affected by Globalization

After 1995, particularly after joining treaties with foreign enterprises for oil supplies, the country started experiencing rapid growth.... Since independence, the economy of the country has been transformed from centrally planned economy to a free market economy.... As the economy approached towards stability, many foreign investors got attracted and companies started investing foreign capital in order to tap lucrative business opportunities lying in the economy (International Monetary Fund, 2012)....

6 Pages (1500 words) Assignment

The Oil Explanation and Marketing Companies: Oil-Producing Regions

The reduction in oil production and expectations about the tightening of the global economy in the coming future is aimed to catch the diminishing trend in oil prices.... This provides the OPEC representatives with insight about existing market trends and expectations about future oil prices that is directly correlated with growth in the international economy.... Similarly, the increase in oil demand followed by some increase in production by a cartel (as OPEC work to maintain some demand/supply gap or never attempt to achieve 100% equilibrium) anticipates the surge in both oil prices and profit margins....

8 Pages (2000 words) Research Paper

Oil Companies: Do Oil Companies Get Big Bucks While the Rest of Us Pay $3 a Gallon

Its main objective is shifting bargaining power to the producing countries, and away from the large oil companies.... This was to secure the producing countries from the exploitation of those large oil companies (Inkpen and Moffett 7).... The author of the paper states that a combination of energy efficiency, conservation, and renewable energy alternative will be essential to support and help humanity to move to a post-oil era.... This is to reduce the over-dependency of the globe on oil....

6 Pages (1500 words) Research Paper

What Sets Oil Prices

… The paper "What Sets oil prices?... oil prices fluctuate globally.... The paper "What Sets oil prices?... Crude oil must be taken to refineries to provide usable oils (Austin, “What sets oil prices”).... Indices may be used as indicators of prices, but do not necessarily determine the price of oil as there is no law in the determination of oil prices.... Large oil consumers like the United States and China may benefit when the prices of oil go down since the large corporations that consume oil make more profits (Austin, “What sets oil prices”)....

1 Pages (250 words) Essay