...Oil price: traders and CEO’s clash over recovery prospects OBJECTİVES *What is the OPEC and it’s main goals? *Why are oil prices falling? *Who are the winners and who are the loosers? *Consequences of falling prices. *Important comments about oil price. What is the OPEC and it’s main goals? Organization of the Petroleum Exporting Countries (OPEC), a permanent, international organization headquartered in Vienna, Austria, was established in Baghdad, Iraq on 10–14 September 1960.Its mandate is to "coordinate and unify the petroleum policies" of its members and to "ensure the stabilization of oil markets in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers, and a fair return on capital for those investing in the petroleum industry. In 2014 OPEC comprised twelve members: Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. Why are oil prices falling? Here are four main factors driving oil’s sharp decline: 1. US oil production is booming Exploding US oil production has transformed one of the world’s leading oil consumers into one of its leading producers as well – in fact, North Dakota alone produces a million barrels of oil per day. US production now rivals oil giants Saudi Arabia and Russia, largely thanks to innovative drilling that has unlocked oil and natural gas deposits trapped in shale rock. US production has...
Words: 1530 - Pages: 7
...Aggregate Supply Article: http://www.dw.de/russia-and-venezuela-to-fight-low-oil-price/a-18072639 Summary: ‘Russia and Venezuela to fight low oil prices’ is the title of this article it discusses how the surprisingly low prices of oil have had a huge impact on Russia because the supply of oil has outstripped the demand. There is also mentions of a 30% decrease in the prices of oil, the article also says that the demand for oil has been falling everywhere and these oil dependant countries believe that the only way to drive oil prices back up and maintain some form of income for the economies as a whole is to ‘cut the aggregate production in the face of weaker demand’. Opinion: In terms of my opinion I find this article interesting as there are lots of problems in all of these countries that are causing oil prices to fall. For me I feel like it’s clear that one of the large reasons for the fall in aggregate demand for oil is that China has faced an extreme slowdown in economic growth and Japan have fallen in to recession, these huge countries account for a large share of the demand for oil hence the drop. In terms of aggregate supply it means that production has to be cut massively in Russia and Venezuela as mentioned in the article because this will be the only way to drive the prices back up, in my opinion if the aggregate supply of oil doesn’t decrease it will mean that all economies will face lower oil prices for an extended period meaning the Russian and Venezuelan economies...
Words: 313 - Pages: 2
...Country Analysis Venezuela Culture Venezuela's Uncertainty Avoidance (UAI) of 76 is slightly below other Latin Countries average of 80, indicating the society’s low level of tolerance for uncertainty (Geert Hostede). In an effort to minimize or reduce this level of uncertainty, strict rules, laws, policies, and regulations are adopted and implemented. The ultimate goal of this population is to control everything in order to eliminate or avoid the unexpected (Geert Hostede). As a result of this high UAI, the society does not readily accept change and is very risk adverse. Next, Venezuela has the highest Masculinity (MAS) ranking among the Latin Countries at 73 compared to 48. The high masculinity means the male dominates a significant portion of the society and power structure. Venezuela has a very low Individualism (IDV) ranking at 12, compared to other Latin countries averaged at 21 (Geert Hostede). The country is more collectivist which is manifested by long-term relationships, loyalty is very crucial in a collectivist society. Below are Hofstede’s charts so you can see the comparisons between Venezuela and other Latin American Countries. [pic] [pic] The Political Environment Venezuela’s structure of government is similar to the United States. Venezuela is a federal republic, with a president as the head of both the state and the government. This form of government has been in place since 1999 and Hugo Chavez has been the president since then. Under...
Words: 1108 - Pages: 5
...Algeria * Angola * Ecuador * Iran * Iraq * Kuwait * Libya * Nigeria * Qatar * Saudi Arabia * United Arab Emirates * Venezuela | Leaders | - | President | Rostam Ghasemi | - | Secretary General | Abdallah el-Badri | Establishment | Baghdad, Iraq | - | Statute | September 10–14, 1960 | - | in effect | January 1961 | Area | - | Total | 11,854,977 km2 4,577,232 sq mi | Website www.opec.org | | Currency | Indexed as USD-per-barrel | | | | Current members OPEC has twelve member countries: six in the Middle East, four in Africa, and two in South America. Country | Region | Joined OPEC[25] | Production (bbl/day) | Algeria | Africa | 1969 | 2125000 !2,125,000 (16th) | Angola | Africa | 2007 | 1948000 !1,948,000 (17th) | Ecuador | South America | 2007[A 1] | 0485700 !485,700 (30th) | Iran | Middle East | 1960[A 2] | 4172000 !4,172,000 (4th) | Iraq | Middle East | 1960[A 2] | 3200000 !3,200,000 (12th) | Kuwait | Middle East | 1960[A 2] | 2494000 !2,494,000 (10th) | Libya | Africa | 1962 | 2210000 !2,210,000 (15th) | Nigeria | Africa | 1971 | 2211000 !2,211,000 (14th) | Qatar | Middle East | 1961 | 1213000 !1,213,000 (21st) | Saudi Arabia | Middle East | 1960[A 2] | 8800000 !8,800,000 (1st) | United Arab Emirates | Middle East | 1967 | 2798000 !2,798,000 (8th) | Venezuela | South America | 1960[A 2] | 2472000 !2,472,000 (11th) | Total | 33,327,700 bbl/day | WHAT IS OPEC – Summary? The Organization...
Words: 2429 - Pages: 10
...1. What has caused this major drop in oil prices? The reasons why Oil prices are falling down are twofold, they are due to the simple economics of demand and supply. First of all, we can observe a weak demand in many countries due to insipid economic growth, coupled with surging production. Developing countries and the economies of Europe are becoming less oil dependent thanks to the technology, cars are becoming more energy-efficient. So the demand for fuel is logically decreasing. Added to this is the fact, on the supply side, the oil cartel OPEC is determined not to cut production as a way to prop up prices. Moreover, countries like Saudi Arabia, Nigeria and Algeria are now competing to the Asian markets so producers had to drop prices and USA has gave up the imports as its domestic production has doubled these years. Finally lot of competitors are rising such as Canadian, Iraqi or even Russia and they manage to increase their oil production and exports every year. 2. What economic impact would these lower prices have on the world economy including the USA? Like in every changing situation, there are winners and losers. Consumers all around the world will enjoy a main benefit: less expense for the gas! Low prices are excellent news for oil consumers in places like Japan or the US, where gasoline is the cheapest it's been in years. For example, the price of the gallon, in average, fall from $3.28 a year ago to $2.07 and this drop benefit to lower-income groups in...
Words: 652 - Pages: 3
...profile of The Bolivarian Republican of Venezuela; in order to study the current situation of the country for further investigations in the future that may help to understand the opportunities and risk involve in importing and opening new markets in Venezuela. The analysis includes reviews and an extensive research about: First the geography and global information to introduce the country; second, the History since the arrival of the Spaniards. The Political analysis will be explained as much detailed as possible due to its specifics characteristics in the recent decades with the Hugo Chavez’s government. He report draws special attention in the Social analysis is one of the main issues to be reviewed due to its importance at the time of making any decision. The economic aspect of course will be in consideration with both: the Official’s figures and the international observer’s ones, the graphics will be analyzed. It will be also mentioned the Business environments and the principal sectors to invest or that could be interesting to sell. To support all the information in the report before any conclusion, it will be used THE SWOT tool to demonstrate why Venezuela is an interesting place to import, especially in the last 5 years. It is not just a country of striking natural beauty, which ranges from the snow-capped Andean peaks in the west, through the Amazonian jungles in the south, to the beaches of the north, Venezuela is among the most highly urbanized countries...
Words: 6774 - Pages: 28
...Content Content | 1 | Case I | 2 | Case II | 11 | Case III | 20 | References | 30 | Coursework | 31 | Case Study I The Globalization of Starbucks Thirty years ago, Starbucks was a single store in Seattle’s Pike Place Market selling premium-roasted coffee. Today it is a global roaster and retailer of coffee with some 17,000 stores, 40% of which are in 50 countries outside the United States. Starbucks set out on its current course in the 1980s when the company’s director of marketing, Howard Schultz, came back from a trip to Italy enchanted with the Italian coffeehouse experience. Schultz, who later became CEO, persuaded the company’s owners to experiment with the coffeehouse format – and the Starbucks experience was born. The strategy was to sell the company’s own premium-roasted coffee and freshly brewed espresso-style coffee beverages, along with a variety of pastries, coffee accessories, teas, and other products, in a tastefully designed coffeehouse setting. From the outset, the company focused on selling a “third place” experience, rather than just the coffee. The formula led to spectacular success in the US, where Starbucks went from obscurity to one of the best-known brands in the country with over 137,000 employees and $10.7 billion in annual revenues. Thanks to Starbucks, coffee stores became places for relaxation, chatting with friends, reading the newspaper, holding business meetings, or (more recently) browsing the Web. In 1995, with 700 stores...
Words: 4255 - Pages: 18
...drop in crude oil prices — a development that has boosted consumer confidence, hurt once-booming energy states and presented new opportunities — and challenges — for the U.S. and global economy. Q: Why did oil prices fall so much, so fast? A: A confluence of factors has contributed to the more than 50 percent slide in oil prices since September. The biggest is the steady rise in world petroleum supplies, mainly because of the shale-oil revolution in the U.S. Thanks to hydraulic fracturing, or fracking, and other drilling techniques, the U.S. has accounted for more than 80 percent of global crude production growth in the last five years. More recently, an increase in oil output in Iraq and Libya has further boosted capacity. At the same time, there are signs of softening demand. Economies in Europe and Japan have been stagnant, and the Chinese economy, the biggest driver of global oil demand, is slowing down. The strong dollar also has helped pushed down oil prices. Q: How long will it last? A: Low prices at the pump may be short-lived because the cost of crude is likely to start rebounding in the second half of this year. That's based on predictions of future supply and demand, including that low prices will stimulate greater use and therefore lead to an increase in demand. Oil futures lately have been trading at about $45 per barrel, compared with an average $100 in the first half of last year. By this time next year, Moody's Analytics estimates that oil will bounce...
Words: 1068 - Pages: 5
...You can’t go anywhere in this modern world without being affected by the oil industry. We depend on the oil industry to maintain or comfortable way of living. The oil business is all about finding, extracting, transporting, marketing and refining petroleum products. The main petroleum based product is gasoline. We use gasoline everyday in our vehicles. We count on gasoline to get us to our important destinations, because most of these destinations would be time-consuming and exhausting to reach on foot alone. Petroleum is pretty much vital in many of today’s industries. 40% of America’s energy consumption is oil and 30 billion barrels of oil are used every single year. In 2005, the United States of America consumed 21,930,000 barrels of oil in a single day. The production, distribution, refinement and retailing of petroleum make the petroleum industry the largest profit making industry in the world. In America we pay a gasoline tax for the gasoline we buy. This gasoline tax is collected by the Federal Highway Trust fund and is used to pay for road maintenance and other transportation projects or needs here in our country. Therefore, gasoline tax can be described as a “user’s fee”. You drive on the roads, which increases wear and tear on the roads, so you pay the tax on your gasoline in order to maintain the roads. There has been a tax on gasoline since 1919. The initial tax rate was only 1 cent on the gallon, but today, more then 50 years later, we pay around 18-19...
Words: 1908 - Pages: 8
...Demand And Supply Of Crude Oil 10/10/2009 Introduction Crude oil is a naturally occurring substance (i.e., “Fossil Fuel”, formed from organic remains over a period of millions of years) found in certain rock formations in the earth. It is a dark, sticky liquid which, scientifically speaking, is classified as a hydrocarbon. This means, it is a compound containing carbon and hydrogen, with or without non-metallic elements such as oxygen and sulfur. Crude oil is highly flammable and can be burned to create energy. Derivatives from crude oil make an excellent fuel. Uses Different types of oil that are obtained from crude oil are as mentioned below: 1. Ethane and other short-chain alkanes 2. Diesel fuel (petro diesel) 3. Fuel oils 4. Gasoline (Petrol) 5. Jet fuel 6. Kerosene 7. Liquefied petroleum gas (LPG) 8. Natural gas Certain types of resultant hydrocarbons when mixed with other non-hydrocarbons, create other products like: 1. Alkenes (olefins), which can be manufactured into plastics or other compounds. 2. Lubricants (produces light machine oils, motor oils, and greases, adding viscosity stabilizers as required). 3. Wax, used in the packaging of frozen foods, among others. 4. Sulfur or Sulfuric acid. These are useful industrial materials. Sulfuric acid is usually prepared as the acid precursor oleum, a byproduct of sulfur removal from fuels. 5. Bulk tar. 6. Asphalt 7. Petroleum coke, used...
Words: 3715 - Pages: 15
...Economy of Venezuela Contents *Executive Summary 2 1 Venezuela Profiles 3 1.1 Geography 3 1.2 Population 4 1.3 Political System 4 1.4 Economic System 4 1.5 Market Spotlight 5 1.6 Trade Agreements 6 2 Doing business in Venezuela (Compare with China) 6 2.1 Starting a business 7 2.2 Dealing with construction permits 8 2.3 Employing workers 8 2.4 Registering property 9 2.5 Getting credit 9 2.6 Protecting investors 10 2.7 Paying taxes 11 2.8 Trading across borders 12 2.9 Enforcing contracts 12 2.10 Closing a business 13 2.11 The ranks trend of 10 Factors from 2007 to 2010 in Venezuela 13 2.12 The ranks trend of 10 Factors from 2007 to 2010 in China 14 3 Global Competitiveness Index 15 3.1 The comparison (Score) of GCI with Venezuela and China in 2010 16 3.2 The comparison (Rank) of GCI with Venezuela and China in 2010 16 3.3 The trend of GCI (Rank) 2 countries from 2002 to 2010 17 3.4 The trend of GCI (Score) 2 countries from 2005 to 2010 18 4 Conclusion 18 4.1 Market Challenges in Venezuela 18 4.2 Market Opportunities in Venezuela 19 4.3 Experience from China 19 4.4 Recommendation of Strategy 20 4.5 Venezuela Economy: Impact of Nationalization 20 *Executive Summary My selected country Venezuela is the worst rank, in order to evaluate the business environment, first, I do some research for Venezuela profiles, which include basic information...
Words: 3694 - Pages: 15
...OPEC's Price-Making Power Author(s): Kaushik Ranjan Bandyopadhyay Source: Economic and Political Weekly, Vol. 43, No. 46 (Nov. 15 - 21, 2008), pp. 18-21 Published by: Economic and Political Weekly Stable URL: http://www.jstor.org/stable/40278171 . Accessed: 28/11/2014 09:41 Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at . http://www.jstor.org/page/info/about/policies/terms.jsp . JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org. . Economic and Political Weekly is collaborating with JSTOR to digitize, preserve and extend access to Economic and Political Weekly. http://www.jstor.org This content downloaded from 103.4.92.53 on Fri, 28 Nov 2014 09:41:36 AM All use subject to JSTOR Terms and Conditions COMMENTARY Power OPECs Price-Making ^= BANDYOPADHYAY KAUSHIK RANJAN of The Organisation Petroleum is Countries a Exporting of dominant cartel consisting withlargereserves producers its and ithas alwaysexercised inthecrude power price-making in oil market. However, thepast opec has been few years, that claiming ithas lostitspower The crudeoil prices. to alter whether opec's article explores claimis correct. is at...
Words: 3570 - Pages: 15
...publishing. However, in view of the natural scope for human and/or mechanical error, either at source or during production, Business Monitor International accepts no liability whatsoever for any loss or damage resulting from errors, inaccuracies or omissions affecting any part of the publication. All information is provided without warranty, and Business Monitor International makes no representation of warranty of any kind as to the accuracy or completeness of any information hereto contained. ISSN 1474-5615 Vol 29 Issue 3 March 2012 Andean Business Monitor International’s monthly regional report on political risk and macroeconomic prospects THIS MONTH’S TOP STORIES VENEZUELA Living On The Edge BMI View: This year will be of pivotal importance for Argentina and Venezuela, with potential knock-on effects for the entire region. Both countries are on a highly unsustainable macroeconomic trajectory, which could lead to an economic and political implosion....
Words: 8831 - Pages: 36
...Recession A significant decline in activity across the economy, lasting longer than a few months. It is visible in industrial production, employment, real income and wholesale-retail trade. The technical indicator of a recession is two consecutive quarters of negative economic growth as measured by a country's gross domestic product (GDP); although the National Bureau of Economic Research (NBER) does not necessarily need to see this occur to call a recession. Recession is a normal (albeit unpleasant) part of the business cycle; however, one-time crisis events can often trigger the onset of a recession. The global recession of 2008-2009 brought a great amount of attention to the risky investment strategies used by many large financial institutions, along with the truly global nature of the financial system. As a result of such a wide-spread global recession, the economies of virtually all the world's developed and developing nations suffered extreme set-backs and numerous government policies were implemented to help prevent a similar future financial crisis. A recession generally lasts from six to 18 months, and interest rates usually fall in during these months to stimulate the economy by offering cheap rates at which to borrow money. The sharp decline in economic activity during the late 2000s, which is generally considered the largest downturn since the Great Depression. The term “Great Recession” applies to both the U.S. recession – officially lasting from December 2007...
Words: 2687 - Pages: 11
...subsidiary of Oil and Natural Gas Corporation Limited (ONGC), a Central Public Sector Enterprise/Undertaking (CPSE/CPSU) of the Government of India, under the administrative control of the Ministry of Petroleum & Natural Gas (2MoP&NG). OVL is engaged in exploration and production of oil and gas outside India. OVL was incorporated as Hydrocarbons India Private Limited, on March 5, 1965 with registered office in New Delhi to perform international exploration and production business. The Company was rechristened as ONGC Videos Limited w.e.f. 15th June, 1989. With the widening of the energy supply gap from domestic production, participation in oveRs.eas oil and gas assets for equity oil was revived in the mid nineties. OVL participated in few exploration projects then, which could not bear desired results. In January, 2000, OVL was granted special empowerment by the Government. The special empowerment facilitated better and smooth functioning of the Company in the international environment as evidenced by a string of successful acquisitions post January, 2000. OVL presently has participation either directly or through wholly owned subsidiaries/joint venture company in 33 E&P projects in 14 countries namely Vietnam (2 projects), Russia (2 projects), Sudan (3 projects), Iran (1 project), Iraq (1 project), Libya (1 project), Myanmar (2 projects), Syria (2 projects), Cuba (2 projects), Brazil (6 projects), Nigeria (2 projects), Colombia (6 projects), Venezuela (2 projects)...
Words: 7361 - Pages: 30
