...High Fuel Prices and its Effect on the U.S. Economy The United States economy as a whole has been rapidly dwindling down of late, from its all time high marks in the late 1990’s and early 2000’s. Many Americans believe that the cause for this large downswing in the economy is due to the fact of the cost that the United States is putting into the War in Iraq. The war has caused some economic inflation over the past couple of years however; there are other factors that tie into the economic problem of America. One key factor that many people are surely aware of is the high and outrageous gas and fuel prices across the country. Though many Americans are aware of the extremely high gas prices, they don’t fully understand how fuel prices have a monopoly effect on the country and how the U.S. economy is greatly affected because of this. (How Gas Prices Affect Our Economy) Over the past few years gas and fuel prices always seem to be in the news. At first, prices seemed to be high one week and low the next. Now, it just seems that the prices are extremely high and won’t go down. Many times you hear big time politicians say the reasoning for these high prices is due to shortages of oil. This is not the case, for there is no shortage at all. Gasoline reserves on hand are at the highest levels they have been since the early 1990s and the oil deposits under ground aren’t running out either. (There Is No Gas Shortage – BusinessWeek ) So why are politicians saying there is a shortage...
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...at oil prices in terms of inflation, we realize that this is one of the strongest components why the economy is collapsing and now we are on tipping end of a dangerous bout of deflation. The problem of deflation is that it renders any and all debts dangerous and a country as indebted as the United States of America, simply cannot risk that outcome of it. The economy is affected by many factors that determine if it is strong enough or simply too weak. These factors have to do with buyers consuming goods and services and how often they do this. Do the goods and services that are consumed by people create wealth, jobs, and a better overall economy for a country? In this paper I will discuss how the oil practices affect the economy and to what extent. Throughout history we have seen evidence of some economies that have evolved faster and stronger than others. Policies that the government places on industry, technology and the environment can all affect the prosperity of an economy. Of the factors that affect economic growth the industry of oil and gas is one that holds a dominant spot in the world's and America's economy today. When evaluating the economic growth factor of economy and specifically oil and gas one must consider some factors such as: the relationship that it have with the whole economy, the way it affect economic growth, what it a cause or effect of economic growth, along with a few others. In respect to how economy is affected by oil and gas all of...
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...Gas prices need to stay low and remain constant over the course of a year. Whenever gas prices rise so does everything else from groceries to goods. As prices rises families are left with smaller budgets for everything else they require for everyday living. The local economy can be altered by an increase in gas price as well resulting in a slower economy flow. Gas should remain at an average reasonable price based on the local community and average wage. Whenever gas prices rise I notice it the most in common grocery stores. Milk can fluctuate from a dollar to almost 3 times that price. Why are groceries affected by something like gas? Well stores stock goods from all around the country. In order to do that though they have to be transported on big rig trucks. Some one has to pay for the gas used to move a product from say California all the way out here to Arizona for example. The store owners have to find a way to cover the cost of that expense. The usual solution they come to is a rise in prices across the board on products they sell. These price changes are not a flat fixed increase across the board neither. They change on a near daily basis. Certain products from this state may rise in price more so than the products being imported from another state. Now common grocery stores are essential to everyday families. They rely on them for food and a small selection of miscellaneous goods like toilet paper. As the prices here at the storefront rise the pockets of families will...
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...Rising Gas Prices: A Better and Cleaner Earth Essay 2 Embry Riddle Aeronautical University Professor Christine Hansen English 123 May 22, 2007 Abstract The cost of gas has rapidly increased in the recent years. But what most people do not realize is that rising gas prices is a good thing. Most people see gas prices as a thing to hate but in reality it leads to major innovations. Not just better cars but a better environment. The future automotive industry is fueled by the cost of gas. If gas prices stayed low no one would do anything to change and make the future better. Rising Gas Prices: A Better and Cleaner Earth Everyone fells the pain of rising gas prices, but what most people don’t see is the good side. The more gas cost the less people will want to use it. This will lead to better fuel economy, alternate means of travel and ultimately to alternative fuel sources. Rising gas prices will ultimately be one of the greatest environmental events in the history of the human race. Gas prices have been rising for several different reasons including government regulation, low supply from refineries and low supply of crude oil. Gas prices are increasing at an alarming rate; according to the Department of Energy (2007, May 14), the current national average is $3.10. The price has increased over 43% from 2005. The price of one barrel of crud is above $60. These rapid rises in gas prices have already caused changes to the minds of Americans. According...
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...the influences of the global economy. Economic, political, legal, technological, socio-cultural, international demand, supply impacts, and demographic trends are all factors that influence the macro-environment. The macro-environment is always changing, so the success of the business rides on their ability to adapt to these changes and forecast the macro economy better than their competitors (Bodie). Being proactive and making a sound macro-environmental analysis can be a means of gaining a competitive advantage, or at least not being concerned by a competitive disadvantage. In completing a top-down analysis we start with the global economy (Bodie). Technological factors play in to the macro-environment by means of new inventions and development, materials development, innovative manufacturing, distribution and logistics. This also includes changes in the way that information is sent and received. This can be closely related to the environmental impacts that happen within an economy, such as depleting natural resources (Sieminski). The variations of different countries economic performance and within their regions are considerable (Bodie). What happens in other countries’ economies will influence the U.S. economy and its markets in either a negative or positive way depending on the economic circumstance. What is originally forecasted for the macroeconomic expectations through various analyses may not be the overall outcome. The global economy as a whole can be a very critical...
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...1. ARTICLES This article first appeared in The Edge Malaysia Weekly, on December 14 - 20, 2015 [pic] A construction industry executive recently rented a high-end condominium for about 30% less than the going rate a year ago. Why was the condominium so cheap? The property agent replied that the previous tenant — a high-ranking oil and gas (O&G) official — had lost his job. “It’s quite common now for O&G expatriates to lose their jobs, so the property market has also been impacted,” the agent said. According to a senior executive in the once-booming oil and gas sector, as many as 7,000 to 8,000 executives have lost their jobs after the second round of industry-wide retrenchments in the country. He has been told by colleagues that Petroliam Nasional Bhd (Petronas), Scomi Group Bhd and UMW Oil & Gas Corp Bhd have put a freeze on hiring and the list of companies doing the same is getting longer. “Worse still, MMHE [Malaysia Marine and Heavy Engineering Holdings Bhd] is looking to discontinue the services of as many as 800 contractual workers, and Petronas is also mulling over a similar move,” he says. Such moves are often denied and never publicised. An MMHE official tells The Edge that the company only makes such announcements internally, but adds that she has not heard of recent staff-reduction exercises. “MMHE, like most businesses, is operating in a very competitive industry and under tough economic conditions. Regrettably, this often has an unavoidable impact on staff,” an MMHE...
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...STEP 1 | Identify | Low Oil Price In Malaysia | STEP 2 | Dissect | 1. Definition of oil and gas 2. The cause to low oil price 3. The impacts of low oil price to Malaysia economy 4. To know about the advantages and disadvantages of low oil price | STEP 3 | Select | Impacts of low oil price in Malaysia | STEP 5 | Formulate objectives | Main objective is to determine the impact of low oil price in Malaysia Specific objectives: 1. To determine the effect low oil price on people economy 2. To determine whether oil price has long term effect or short term effect on economy | STEP 4 | Raise question | 1. What are the impacts of low oil price on nation economy 2. How does the oil price affect people economy 3. Is oil price has long term effect or short term effect on economy? | SEVEN-STEP APPROACH STEP 6 | Make sure | Assess the objectives in Step 5 in terms of: 1. The work involved: * Find out 5 articles in the internet * Find other related topic from internet such as definition of oil and gas , the cause of oil and gas and to know about the advantages and disadvantages of oil and gas 2. The time available * I did the research after class finish and completed the task given usually at night 3. The financial resources at disposal * I spend my money to print out the report and for references I just took from internet and library. There is no cost for references. 4. Knowledge and expertise in the areaMy major...
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...u r n a l h o m e p a g e : w w w. e l s ev i e r. c o m / l o c a t e / e n e c o Economic impacts of higher oil and gas prices The role of international trade for Germany Christian Lutz a,⁎, Bernd Meyer a,b a b Institute for Economic Structures Research (GWS), Osnabrueck, Germany University of Osnabrueck, Germany a r t i c l e i n f o a b s t r a c t The analysis concentrates on direct and indirect price increases, induced shifts in international trade and structural changes in the oil importing economies. The paper at hand asks, whether a stabilizing effect via international trade and domestic structural change on the GDP of oil importing countries can be observed, if a permanent oil price increase occurs. At least for Germany, structural change from consumer goods to investment goods industry and an improvement of international competitiveness limit negative impacts of increased energy prices. Analysis is based on the extensive and disaggregated global GINFORS model and the detailed INFORGE model for the German economy. © 2009 Elsevier B.V. All rights reserved. Article history: Received 15 July 2008 Received in revised form 13 January 2009 Accepted 27 May 2009 Available online 6 June 2009 JEL classification: Q43 C53 C67 F17 Keywords: Global modelling Energy prices and the macro economy International trade 1. Introduction Oil price shocks have negative impacts on oil importing countries. There seems to be evidence for this plausible result from the literature...
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...Solutions when Fracking to Produce Natural Gas English 215 7 December 2013 Professor Jordan Problems and Solutions when Fracking to Produce Natural Gas In light of the reality of a brutal U.S. Economy and dismal employment numbers, as well as soaring gas prices, it has never been more important than now to aggressively pursue energy independence. One way to do this is to expand fracturing. While this concept is popular in some circles, be they economists or politicians, it is not popular with all, and therein lays the challenge. Where there is challenge though there is also opportunity, and where a problem is identified, a solution must be offered. Does this concept of fracturing make sense to pursue? Yes it does, and we will explore the fracking of shale as a national policy, the challenges thereof, and look at some possible solutions that our lawmakers embrace. We will begin with a brief historical overview of the fracturing of shale. Fracturing in the United States is not exactly unknown, as hydraulic fracturing began in this country 130 years ago, making us the most “fracked” country in the world. Large scale fracking began in earnest though in the 1980s, when Mitchell Energy Development Corporation used this technology on the Barnett Shale play in Texas. What is the current status of shale fracturing? The United States in the past 130 years has produced more than 839 trillion cubic feet of gas (TCFG). Shale gas production is expected to grow 113% between...
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...Fiscal Policy and ExxonMobil Introduction Government spending has been an instrumental component and reflection for the United States economy. As an integral part of the business cycle, the last several years have been through the trough since the recession in 2008. While government spending has been increasing, for a couple years it did reduce in addition to maintaining a steady quantity of spending up until the past few years of recovering and growth. As a result, there has been a steady increase of spending in the past three, with anticipation of greater spending in the years ahead. While the overall amount of spending has been increasing as a result of a stronger economy, there has been a surplus of oil and petroleum drilling. Given the lower demand for drilling, the oil and petroleum industry has been greatly affected with Exxon Mobil reporting lower profits, and BP has been reporting a loss, with anticipation of mass layoffs ahead. (Krauss, 2016) Fiscal Policy, Tax Rates, and the Economy Roughly 35-36% of our total government spending accounts for the gross domestic product (GDP). After the government bailout funding for banking and stimulating the economy with an additional $700B after 2008, over 42% of the annual GDP was of government spending. Federal income tax hovering between 16.8-17.2% for median class income has been consistent for the past several years. “Today's government spending levels are indeed too high, at least relative to the average level of tax...
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...Current Gasoline Prices The supply of gasoline is largely determined by the price of oil. The price of oil can be affected by both supply and demand. Things that affect the supply of oil include wars, terrorist attacks, industrial accidents, weather near offshore drilling rigs and the actions of oil cartels such as OPEC. If any of these things interfere with the supply of oil, it may cause the price of oil to rise, and therefore cause the price of gasoline to rise. In the current state, the market is flooded with oil supply and manufacturing seems to keep on producing. When the market is flooded, the gas prices fall, as in our current case, fall drastically to numbers we haven’t seen in years. We have not seen a decline this drastic since the 1980’s. Demand also affects the price of oil. Increasing demand for oil by developing countries such as China and India can cause prices to rise. Financial speculators can also influence the price of oil. They do this by buying oil in anticipation of future gains in the price of oil. If many speculators buy oil, the oil price will rise rapidly. These occurrences will increase the price of gasoline. If the price of gas falls, consumers spend less of their money on gas. Consumer incomes do not vary at the same rate as gas prices. The price elasticity of demand for gas is very low, so demand for gas will remain fairly constant, even for large changes in the price of gas. The most important impact the price of gasoline has on the economy is its effect...
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...venture to the next, is now seeking to invest in two gas stations and has asked me for my educational perspective. His rationale for this business venture is that American consumers have officially accepted the insanely high gasoline prices and what he doesn’t earn in gas sales, he will compensate with convenience item sales. Willing to do anything to assist my family and also not quite sure if it is a smart investment, I told Aly I would do my research and relay my findings. In order to effectively help ALy, there are certain relevant economic principles that must be assessed and determined. The issues to be addressed when starting a business, such as a gas station, are: demand determinants, supply determinants, costs of production, pricing, and normal or economic profit or loss. Demand Determinants Before any business can begin, regardless of the type of business, the potential business owners and investors must first determine if the demand for the products and/or services the business is providing is high or low. As gas consumers, certain factors are assessed in determining their reactivity to gas prices. Gas consumers must ask themselves: What factors would make them more or less susceptible to price changes in the gasoline industry? Has he/sheresponded differently to price changes in gasoline during certain periods in their life? Why is it that gas price changes at certain stations seem to affect them more than gas price changes in the industry as a whole? In consideration...
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...venture to the next, is now seeking to invest in two gas stations and has asked me for my educational perspective. His rationale for this business venture is that American consumers have officially accepted the insanely high gasoline prices and what he doesn’t earn in gas sales, he will compensate with convenience item sales. Willing to do anything to assist my family and also not quite sure if it is a smart investment, I told Aly I would do my research and relay my findings. In order to effectively help ALy, there are certain relevant economic principles that must be assessed and determined. The issues to be addressed when starting a business, such as a gas station, are: demand determinants, supply determinants, costs of production, pricing, and normal or economic profit or loss. Demand Determinants Before any business can begin, regardless of the type of business, the potential business owners and investors must first determine if the demand for the products and/or services the business is providing is high or low. As gas consumers, certain factors are assessed in determining their reactivity to gas prices. Gas consumers must ask themselves: What factors would make them more or less susceptible to price changes in the gasoline industry? Has he/sheresponded differently to price changes in gasoline during certain periods in their life? Why is it that gas price changes at certain stations seem to affect them more than gas price changes in the industry as a whole? In consideration...
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... First are Laws and supplies it is a pattern of behavior. Second is price elasticity of supply it is a concept to measure of ways to get consumers to changes it price. Third we have Market equilibrium it demand equal quantity supplies at the market price then we have opportunity cost it about making choices to make good first we must compare benefit of something cost. I will be talking the prices of the oil. Two highlight price elasticity is one this article talks about how oil took its lowest hit for the second straight day the stock market took a big hit when market sank at its lowest in six years. This is hurting the energy companies. This is a price change in demand the banks are being patient about raising its interest rate to zero. Which was to be expected? It is said that nothing is to expand at a solid pace .and create job growth Market equilibrium plays a part in this. The market is happy that the fed are saying things are great meaning that market would get it hand at the first price rate. The energy depart U.S. oil rose to its highest. The high supplies drove crude prices to the lowest level since March of 2009.the crude fell $1.78 to close at $44.45. Article Highlights According ( Rothwell 2015) oil weakening global economy which this could put a scare for some people. I think this is good for the economy because it allow us to have more money in our pocket and when we go to the gas pump we can actual fill up and it take us future than we been driving...
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...Economic Profile on the Oil and Gas Industry The oil and gas industry is one of the most talked about industries today, at least in my town it is. Everywhere I go I hear people talking about the rise or fall in gas prices or how the cost of a barrel of crude oil has just gone up or down .10 cents. I also hear about how the current hurricane season could pose a threat to the oil industry, as it did last year with hurricane Katrina, putting oil refineries under water or causing extreme damage to them. In this essay I am going to discuss the shifts and price elasticity of supply and demand in the oil and gas industry. I am also going to discuss the oil and gas industry’s positive and negative externalities, wage inequality, and monetary and fiscal policies. Lastly, I will discuss the economic affects and influence on the oil and gas industry. Shifts and Price Elasticity of Supply and Demand The price elasticity is the affect of the price for a good on the demand of that good. If consumers are not affected by the change in price then this good would be referred to as inelastic. If consumers are affected by the change in price then this good would be referred to as elastic. The oil and gas industry is inelastic when the prices rise because, although consumers slightly reduce their consumption of oil and gas, consumers still purchase oil and gas. With gasoline prices in the U.S. approaching an average $3 a gallon, Americans are moaning about the rising cost, but so far they are...
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