Discussion Post – Coursework Example
Discussion Post Oil prices are linked to a variety of factors ranging from the usual demand and supply to political influences. One factor is the increase in exploration of oil in the Americas. New legislation is allowing exploration of oil in various regions within America, where this activity was not allowed previously. Mexico is continuously struggling to get access to the technology that is essential to explore its underground oil reserves (Jervy & Horn, 2014). For these reasons, it is speculated that production of oil on the international level is likely to witness new heights in the coming future. An additional factor is the development and implementation of technology pertaining to Shale gas; this is rapidly becoming a cheaper alternative to oil (Miller, 2015). Keeping in view these circumstances, the older players in the field of oil are forced to reduce the oil prices dramatically, primarily due to the fact that their influence an only be maintained if worldwide interest in their product is maintained.
The impact of falling oil prices on other sectors of the economy like housing and travel will be positive, since reduced prices contribute to a fall in the services and production costs (Zimpleman, 2015). Since transportation of goods is an unavoidable aspect of trade and business, reduced prices of transportation are likely to contribute significantly in this regard. In areas where oil is routinely used for energy production, reduced oil prices will pave way for further progress by decreasing the costs of energy. Keeping in view these circumstances, it can be concluded that reduction in oil prices is likely to bestow new life to our economy in the coming future.
Jervy, B., & Horn, S. (2014). "No Turning Back:" Mexicos Looming Fracking and Offshore Oil and Gas Bonanza | DeSmogBlog. Retrieved January 29, 2015, from http://www.desmogblog.com/2014/05/12/no-turning-back-mexico-looming-fracking-and-offshore-oil-and-gas-bonanza
Miller, J. (2014). Oil Price Drop and Effect Causes | The Energy Collective. Retrieved January 29, 2015, from http://theenergycollective.com/jemillerep/2146151/are-declining-oil-prices-increasing-risks-opec-us-energy-security-or-clean-fuels-
Zimpleman, L. D. (2015). The Effects of Lower Oil Prices – At A Glance - WSJ. Retrieved January 29, 2015, from http://blogs.wsj.com/briefly/2015/01/13/the-effects-of-lower-gas-prices-at-a-glance/