1973

Background The oil crisis began in October 1973 when Arab oil producers imposed an embargo. As a result the oil prices rocketed from $3 per barrel to $12 by 1974. This disaster was followed by the second energy crisis in 1979. At that time Pierre Wack (1922-1997) was an unconventional French oil executive who developed the scenario process. His success in scenario planning enabled the Royal Dutch/Shell oil giant to anticipate both of these oil catastrophes. Why scenarios Pierre Wack agreed that…

OPEC produce roughly 40% of the worlds oil, therefore if all the remaining producers were able they would massively increase supply and decrease OPEC market share, with a big enough response the price of oil would approach competitive allocation. OPEC must therefore take into account non-members when setting the price. Salant’s model argues that due to the presence of a competitive fringe the cartel must set the price lower than the monopoly price, reduce output and let the price rise rapidly.…

This price is been the lowest since 2009 in US. According to (Williams, 2015) Price controlled was imposed on domestic production from late 1973 to January 1981. It had brought on an excess of issues for US government and to the economy. For instance ,such changes in cost of petrol had straightforwardly influenced transportation costs and any item made with petroleum or petrol items .It too…

The shale oil introduction in the oil market has made a gigantic impact in terms of the supply, demand and prices. This evolution might affect the major players in the market for the short and long run. However, there are a number of crucial factors that affect this advance process in extracting shale oil. First, the break-even price for United States’ shale oil is from 30$ per barrel to 90$ per barrel. In contrast, Saudi Arabia crude oil break-even price is 10$ per barrel according to…

On one side of the argument is the logging industry that makes a living off taking from the land. As a society we need an infinite stream of lumber. This also brings about two major issues on the side against logging. The Endangered Species Act of 1973 has given the government "...the power to protect U.S. species from extinction" (Metrick & Weitzman, 1996, p.1). By adding species to the endangered list this "... opens a legal avenue for development projects to be delayed or canceled and for…

The aftermath of the Vietnam War left a lasting affect on American culture. This was the the longest and most debilitating war for the United States and changed the U.S. forever. There was overwhelming protest and debate on the war and it divided the country and its leaders on the uncertainty of foreign policy. My mother was just a child during the war itself but her family experienced the aftermath of the war economically, socially and culturally. The Vietnam War damaged the U.S. economy,…

The National Energy Act of 1978 was created in response to the energy crisis of the 1970’s. America oil consumption in the early 1970’s was rising, yet domestic oil production was declining. This made the US more and more dependent on foreign oil. In 1973, an oil embargo was imposed by the Organization of Arab Petroleum Exporting Companies (OAPEC), causing fuel shortages and prices to skyrocket. The price of oil shot from $3 to $12 in just 3 months after the embargo. The oil embargo was lifted…

Based on the resource curse thesis, there seems to be an inverse relationship between the abundance natural resources and economic growth. Gelb’s (1988) cross-country economic analysis of oil exporting countries (Algeria, Indonesia, Nigeria, Venezuela, Ecuador and Trinidad and Tobago) was one of the early studies on the negative connection between natural resources wealth and economic development. The studies revealed that windfalls from natural resources during the booms periods of 1974 – 1978…

Sridhar Gogineni in his article The Stock Market Reaction to Oil Price Changes analyzed the stock market’s reaction to oil price changes. Considering the level of interest in oil prices and their supposed impact on the stock market, While the stock market is sensitive to oil price changes, financial media seems to over play the supposed impact of oil prices. Oil price changes most likely caused due to supply shifts, i.e., large price changes over a one-day horizon and price changes during the…

Hydraulic fracturing or fracking made a dramatic entrance into the national and international scene between 2009 and 2014. During these years, the United States became the world's top oil producer. It also created a huge demand for trucking to haul sand, water, equipment, drilling fluids, and other materials. OPEC responded to this challenge by flooding the market with oil to drive down oil prices below the break-even price for doing fracking profitably. The intent was to bankrupt the fracking…