Oil and Gas Industry Sector

million jobs, both full-time and part-time (www. bloomberg. com). This is an estimate of about 5. of the total workforce on the US soil. Figure 1: Dow Jones Industrial Average Key Data Symbol Company Name Last Price Change % Change Volume MUR Murphy Oil Corporation 31. WLL Whiting Petroleum Corporation 30. PBF PBF Energy Inc. MPC Marathon Petroleum Corporation 65. EQT EQT Corporation 18. RRC EQT EQT Corporation -0. DRQ GPOR Gulfport Energy Corporation -0. DNR LNG Cheniere Energy, Inc. NBL HP Helmerich & Payne, Inc. RIGN. CIE Cobalt International Energy, In 0. Figure 2: Top 30 Components of Dow Jones U. S. Oil & Gas The composition of the Oil and Gas industry sector Every company that gets established generates a chain of other industries. For example, when the manufacturing industry grows, sectors like banking, hotel and catering, insurance among others come up.

Regardless of the company consider in the oil and gas field, the equipment used in the production process falls under these categories: rotary field drilling machinery for oil and gas, oil and gas field machinery for production, portable drilling parts and rigs (Kelland, 2015). It is a known fact that the process of exploration and production of oil is very expensive and sensitive to oil prices. When the prices go up, the demand for the equipment for exploration also increases. Statistics show that in the recent past, the equipment branch of oil has contracted to a total revenue of only $13billion for the year 2018. The reason behind this is the oscillating market prices. Primarily, oil and gas products are generated for energy purposes. For example, the LPG product is widely used in the US for cooking by households.

Other products are used as solvents and feedstocks like naphtha. The automobile industry is driven majorly by gasoline, a lightweight product of oil. The future prospects of using petroleum in cars are thin as inventions like the electric car are poised to radically change this line of consumption. Energy Producers The contribution made by the energy producers under the oil and gas industry is immensely crucial. About 10. million workers are employed in different capacities throughout the country (5. of the total workforce in the US), the GDP contribution standing at 8. The employment growth rate in this industry has been increasing strongly and reliably (Bureau of Labour and Statistics of the US). In 2002, Venezuela was in a political war amongst itself and the output given by this country dropped significantly. It led to the sharp rising of the oil prices all over the globe.

Economic sanctions can be introduced to a country and however much it produces to the oil and gas products, their marketability will be hampered. It only takes a superpower like the US which cannot be given economic sanctions by any other country. For a business to thrive in the oil industry, politics must be conducted in a way that will foster good performance. In developing nations and the developed ones alike, the number of automobiles purchased is on the rise. Since the cars bought use gasoline and petroleum products, there will be an extrapolated demand for some time before the world embraces other technologies like the Tesla electric car. This translates to businesses making a lot of profit. Case study: Whiting Petroleum Corporation We will use some statistics on this corporation for oil and analysis.

The company does oil and gas exploration within the United States, acquiring, producing and supplying a number of petroleum products. which is a measure of market risk of volatility. The value, being more than 1 implies that the company can be rocked in a bad way when financial hard times set in. It faces challenges of—commodity price fluctuations, regulation by the federal and state e. g. air emission and hydraulic fracturing, potential change in the law which will affect the whole oil and gas industry negatively, competition from other companies, and adverse weather which sometimes slows down the production process (Yusuf, et al. The periodic highs and lows are caused by a range of factors, which are chiefly external to the business environment. Investor’s expectations on the stock market can change the overall market prices.

There are times investors at the SMEs project that the near future will realize huge profits for their money. They pump in a lot of dollars buying acquiring of the outstanding shares (Benes et al. In return, they hope that the oil will pay them well such moves act only to push the stock prices higher from where they previously were. Starting from the exploration stage, currently, oil reservoirs can be accurately tested and their capacities ascertained. Oil and gas businesses are willing to invest heavily by raising their capital allocation because they are sure of gaining in a short time. The conundrum oil businesses experience in making change management for increased efficiency will be sorted out by technology (Benes et al. Mobile technology and the latest trends will, and have enabled the companies to improve on safety, do a real-time analysis of the products e.

g. There shall be a great value of investing heavily in the oil industry with technology. The trade-off between expenditure and revenue margin realized is admirable. It will be beneficial to Whiting Petroleum Corporation will expand in its market capitalization and revenue by embracing technology fully. Unfortunately, the oil reserves on the earth are only diminishing. That is why the exploration activities in the past 40 years have reduced by more than half as when compared to the 1960s and 1970s exploration where discovered oil fields in many reservoirs worldwide (Benes, et al.  Research Policy 43. Golden, Jay S. et al. An economic impact analysis of the US biobased products industry: A report to the Congress of the United States of America. Industrial Biotechnology 11. The role of inventories and speculative trading in the global market for crude oil.

 Journal of Applied Econometrics 29. Mitchell, John V. and Beth Mitchell. Structural crisis in the oil and gas industry. gov/energy Oil and Gas Extraction retrieved from https://www. bls. gov/iag/tgs/iag211. htm.