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1.Please submit by Friday of Week 1 topics and brief justifications for your two papers below Both the Current Event and the Term Paper must analyze viable business issues. 1. Current Event Paper...

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1.Please submit by Friday of Week 1 topics and brief justifications for your two papers below

Both the Current Event and the Term Paper must analyze viable business issues.

1. Current Event Paper

Describe in 2 lines why this topic (less than one year old) is important for global business.

As per the course outline:

A topic of current interest in global business such as “Offshoring in the Global Economy”, “Impact of Oil Prices on World Business,” “The Yuan Devalued,” etc.

Current Event papers must deal with international business issues. Issues of political, military, cultural and other nature are only acceptable if there is a direct and evident international business implication clearly explained in the paper. Papers lacking such connection will receive a reduced score.

2. Term Paper Topic

Explain in 2 lines why or how the international business issues treated in your selected topic might affect a specific country, industry, economic sector or firm.

Term Papers must deal with international business issues. Issues of political, military, cultural and other nature are only acceptable if there is a direct and evident international business implication clearly explained in the paper. Papers lacking such connection will receive a reduced score.

2.This 15-18 page paper must be typed with a 1” margin on all sides, 5-space indentation, font 12 Times Roman, double-spaced. The paper will include a cover page, a XXXXXXXXXXword abstract page, introduction, the body of the paper, conclusions, and references on a reference page. The paper should include at least six academic references. It must comply with APA rules.

Use APA style quotations/references following the guidelines shown in the links below:

·APA Style Quick Answers - References

·APA Style Publication Manual

3.This WIKI will be built on and shared by classmates to explain and show how you are adding quality into your projects. For example if someone is searching for peer reviewed journals on a particular subject you can share how you found support materials related to your particular subject. Also if you run into some quality references which could help you have higher quality information for your project share your findings. You should be adding to the content 2 times per week at least 300 words or providea graphic depiction of what your findings.


Number 1 is due byThursday June 7th, You would need to select a topic for the 16 page paper, I need it for approval by Thursday June 7th. together with the current event paper and the term paper topic

Number 2 is dueJune 27th. please use APA. I had a problem on my last paper which lead to a low score

Number 3 is due on Thursdays weekly starting June 7th.

Let me know if you need more clarification

Answered Same Day Jun 06, 2020

Solution

Akansha answered on Jun 13 2020
140 Votes
_US economy.edited.docx
Impact of Oil Prices- Case of US Economy
Name
Class
Subject
Unit Code
Professor’s Name
Date
Abstract
The world has seen some cycles of fluctuations in crude oil prices in the recent decade. This has resulted in economic shock for some nations while some are less affected with the same. World oil prices are of much importance to the business sector and consumers as it directly affects the cost of production and services. One of the largest oil producers in the world is the United States which has started energy production through the technology of shale deposits. The industries in the US are affected by the changes in oil prices differently in various states depending on the oil production engagement and concentration of other industries in the state. The report highlights the impact of oil prices on the business and production costs, employment, state economic activity, banking and investment sector and the debt levels of the oil and gas industry in the US. The oil price shocks affect the US economy but not to the level that it may collapse. Over the time, it has diversified its business sectors to be capable of abso
ing the price shocks and supply challenges of the crude oil.
Contents
Abstract    2
1. Introduction    4
2. Analysis of World Oil Price Fluctuations    5
Figure-1 Oil prices per ba
el (2008-2016)    5
3. Oil Prices and US Economy    6
3.1 A Fortune Reversal    6
3.2 Oil Prices and Business Costs    6
3.3 Impact of Oil Prices on Employment Status of Fossil Fuel Sector of US    7
Figure- 2 Employment in Fossil Fuel Industry, US    8
3.4 Oil and Gas Industries and State Employment    8
Figure- 3 State Employment Proportion    10
Figure- 4 Shale Oil and Employment Growth    11
3.5 Impact of Oil Price Shocks on Economic Activities of Different States    11
Table- 1 Elasticities of Industries Concerning Oil Prices    12
Table- 2 Estimated Employment Response to a 25 Percent Increase in Crude Oil Prices, 2012    13
Figure- 5 Estimated Employment Response to a 25 Percent Increase in Crude Oil Prices, 2012    14
3.6 Oil Prices and Bankruptcy of Shale Oil Companies in the US    14
3.7 Oil Prices and Banking Sector of US    15
Figure- 6 Capital Expenditure for exploration and oil prices    16
3.8 Diversity in US Industries- A benefit    17
4. Conclusion    17
5. References    19
1. Introduction
The world has observed fluctuating oil prices since few decades which have affected the world economy in a certain way. If we look at the statistics, the rates have fluctuated between highs till $145 and lows of $15 per ba
el from 1950 to 2016, and the cu
ent rate of crude is $68. This represents the frequent transition of oil prices in the world which is caused due to many fluctuations in the political environment, demand and supply of the same etc. The important question raised here is about its impact on world economy at large. The households, business organizations, national income, GDP, CPI etc. are affected to a large extent whenever there is a change in the oil price. Oil is used as a major raw material in many businesses which affects the B2B and B2C interactions. The high prices of gasoline affect the purchasing power of consumers resulting in lower demand for other products as well in the market. The production processes become expensive, transportation cost goes up, imports are cut, and employees are laid off, all as a result of high oil prices. All these consequences are passed on to the consumers in the form of high prices of products and services, further increasing the inflation rates of the country. There are certain nations who win in this situation while there are nations who suffer badly. When the oil prices are low, the oil importing nations such as India, China, Japan, Western Europe are at the profit while exporting and oil-producing nations like Kuwait, Iraq, Russia, U.S, Nigeria are at a loss. Many countries have faced recessions or even collapse due to these wide fluctuations in crude oil prices because of which the fluctuations are observed very closely by the economists and decision makers.
One of the reasons for declining oil prices since 2008 has been the production facilities established by the US for extracting oil and gas from shale technology which uses hydraulic fracking. It has driven the prices of oil in the world to an all-time low while boosting the production capacity in US (GRIFFIN, 2018). Oil imports were one of the major expenses of US before 2008 and Saudi Arab, Nigeria etc. used to sell oil in the US who are now forced to sell their production in other markets of the globe. This aspect of US economy is driving the world business along which would be further discussed in this report. The oil prices are affecting the US economy differently after the establishment of production in oil and gas sector which will be stated in the report later. The report would also present the impact of oil prices on other business sectors of US if any.
2. Analysis of World Oil Price Fluctuations
The oil prices have presented two phases of highs as well as lows after 2008 without any indication of the constant situation in future. It can be predicted that the world is into the unchartered region as it has witnessed historic values, i.e. highs during 2010-13 and a continuous downturn after that which has been the highest after the 1980s.
Figure-1 Oil prices per ba
el (2008-2016)
The oil prices had shown a good sign or recovery after 2016 when it touched a low point of $26 per ba
el. There are many experts who think optimistically about the prices from now. The control of OPEC on crude prices has shifted because of its competitors in the US who are producing the oil from Shale. OPEC has now decided to sell more oil at lower prices rather than higher prices to affect the US economy at large.
The reason for the surge in oil prices between 2004-08 was an unexpected boom in global economy particularly in India and China who kept the demand up for oil. Further, the prices dropped drastically between mid-2014 and 2016 because the supply outdid the demand. US oil and gas sector ventured into new oil fields and increased the supply of oil (Baumeister & Kilian, 2016). Libya and Iraq gave the good response to oil production, US was resilient in the continuous supply of oil when the prices were falling and high production by Russia, Iran and Canada, all contributing to great supplies and low prices.
3. Oil Prices and US Economy
3.1 A Fortune Reversal
The U.S. was fighting for a comeback in the early 1900s and 2000s due to the reduced domestic production of oil and gas and was importing in major quantities. Its business and economy had suffered from recession, high inflationary pressure and economic stagnation few times during the 1970s because of the low supplies of oil from exporting countries in the world (Aastveit, Bjørnland & Thorsrud, 2014). In later 2000s, it gained from the new technology to extract oil and gas cost efficiently from shale deposits. Shale oil extraction consists of an unconventional production process in the industry. This transforms kerogen present in oil shale to oil through dissolution. This shale oil extract is then utilized as fuel for various industries. It is generally done above the ground level through oil shale mining. This was not considered practically before due to the projected higher costs of drawing.
The oil prices were high that time which helped in justifying the high expenses of hydraulically ruptured wells. The U.S. bounced back to the position amongst top producers of crude oil around the globe. Higher domestic production helped U.S. in achieving positive results in the business sector as well. The impact of drop in oil prices now shatters the economy and business of U.S. in a different way than before. Higher availability of energy resources in domestic market helps US in lowering the dependence on other countries to import fuel and also helps in business diversification. But this high also gives rise to some vulnerability. Evaluation of the impact of US oil production on state economies have resulted in the fact that some states producing oil and gas are less diversified economically and also more vulnerable to the decline in oil prices.
3.2 Oil Prices and Business Costs
The changes in energy prices control the cost of production and processing of various industries around the United States. As an instance, the cost of fuel used in airplane or price of gasoline are directly associated to the cost of goods and individual transportation. Now, a reduction in fuel cost would result in low costs of transport and inexpensive air tickets. Oil is the source of many industrial chemicals, which gets benefited due to reduction in oil prices and advantage is passed on to the manufacturing businesses. This scenario was before the oil production through Shale in US resurged. The drop in oil prices was considered to be very positive for the business as it resulted in lower cost of imports of oil and gas, lower price of raw material for the production sector as well as transportation costs (Baumeister & Kilian, 2016). This benefit of low costs would then be passed over to the consumers. The consumers would get higher discretionary income at their end for purchasing other goods which would further affect the economy. But now, the oil production through Shale has increased in United States, which has changed the business impact and economic environment of the US which might get hurt by the lowering of oil prices. It directly affects the energy production companies and industry workers of the state. On the other side, higher oil prices increase the costs of conducting business. The higher costs in the similar fashion are passed over to the consumers as well as business houses. It can be expensive taxi fares, airline ticket costing, expense of shipping the apples from California or some new goods to be imported from China, hike in oil prices would give way to hike in prices of even unrelated goods and services.
3.3 Impact of Oil Prices on Employment Status of Fossil Fuel Sector of US
Until recent times, the oil and fuel industry of the US suffered from many highs and lows of the fluctuating oil prices in the world, with a long-term recession which highlighted the lack of resources for oil and gas in the US itself (Kilian, 2014). During the period of early 1980s which represented oil boom, the contribution of major industries which are sensitive to the world oil rates namely coal mining, oil field equipment, oil extraction, refinery and petrochemicals, to employment was approximately 1.7 million jobs i.e. 2% of non-agricultural employment in United States. This share of employment by these five sectors reduced to around 0.5% of United States employment by 2000 i.e. approximate of 458,000 jobs only. Then the oil and gas prices started to rise during early 2000 which resulted in increasing employment in oil and gas industry. Post 2008, the extraction of oil and gas from...
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