Oil Industry Research Paper

Oil prices around the world are decreasing, and it may be cause for concern. While many consumers are pleased with this news, the oil industry is failing and it is having a devastating impact on oil producing countries. If oil prices continue to decrease and the supply of oil remains high due to dwindling demand, the effects can be detrimental worldwide. The factors that are affecting oil prices include a decrease in project investment, an increase in domestic supply, and the increase in usage of alternate resources. The oil industry has been robust for many years, prior to the current downturn. During those years, there was a steady increase in the number of oil projects Now, with the drop in oil prices, and profitability, the investment dollars supporting the oil projects are drying up and there is not enough money to keep them going. A large number of the projects are now perilously close to failing as they are floating in debt due to a lack of support and a surplus of oil supplies. The oil companies could shut down the projects completely, but they are stuck with all of their products. Shutting down completely would be even more costly than cutting back production because it would further decrease their revenues, one such example would be Nigeria. The Nigerian gas and oil industry has been seeing a large decrease in their …show more content…
During that time, the consumption of the oil was winning over the production rate, causing the price of crude oil to increase at a rapid rate. Yet, over the past year, oil prices have gone down significantly due to a decrease in the demand for oil. At this point in time, oil prices are predicted to remain on the lower side over the next few years. This is due to the belief that the production and the consumption of oil will eventually balance themselves out and find a happy