The supermajors in the petroleum industry are considered to be as the “Big Oil”, it…
Oil Prices below $50/BBL
Oil Prices below $50/BBL
The oil prices recently have gone below the expectations of all the analysts. It is suggested that the prices will remain low through 2018. The reason behind this reduced price remains the same and it is the excess supply of Oil products. The value of inventory throughout the world is very high as the Iranian production is increasing that in unsettling the entire market. The foremost threat is not the decreasing oil prices over the years, it is just the initiator of the disturbance in the energy market that is leading to putting the international market at risk. The consumers are price sensitive and with the gasoline cost being so low, the alternative is being considered as attractive, that is leading to a long-term concern for the industry.
Production Maximizing Policies
The production of oil is already too much that it has shown its impact on the prices. The demand for oil has gone down because of the substitute products that are being offered in the market which are convenient and efficient as well. The production maximizing will eventually lead to more reduced prices, which can help the small players who have the storage capacity to store the product and sell it when the demand increases. Every country tries to maximize their market share and for that, they tend to produce more of the good in which they have their command to generate export income.
Low Carbon Global World
It is shared that burning the carbon has some costs attached to it. Wildfire, scarcity and the level of a sea that is rising are symptoms of the fossil economy. The more we burn carbon the cost adds up. The issue here is that no one accepts that the biggest oil businesses are previously responsible for sufficient release which can be seen in the damage that it had caused in their value. In simple worlds, they should be claimed to be contributing negatively to the economy. In a recent search, it was confirmed that the negatives attached to emission carbon in the atmosphere are way huge then the profit it generates for these businesses. The factors can be the cost of the climate which can never be paid by any of these manufacturers. The future of these companies is still based on the carbon burn which should be declared as unburnable.
The possible chances are that the prices might fall even more than the anticipated. The Big Oil must try to tap new markets and make itself available in those areas where it had never done operations. The industry is at a point of strategic inflection. The era of technology has arisen for the oil companies it will be better to adopt new strategies. The one thing that needs to be pointed out is that the presence of oil is in some threatening environment and the politically disturbed regions. Oil in the future will be found in the deep water and other such hazardous areas, the projects for development will require huge investments.
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