The Story Of Rise Of The Oil Industry

Oil industry was once the most profitable industry owing to the fact that countries all over the world need lots of oil barrels to meet their energy demands. Hence, oil was one of the most imported products as despite the high prices, countries needed to import oil barrels.

Oil finds it use in a lot of day to day routine works. They are needed as fuels in vehicles in airplanes so naturally; all countries would need to stock ample supply of oil if they do not want to upset the regular running of various daily activities.

Hence, oil industry was one of the most profitable ones as the gulf countries cashed in this situation and earned lots of revenues. However, market analyzers are of the opinion that in the year 2012, the oil industry can face a major setback as the blows of recession are going to hit them hard. A lot of factors, logics and trends have been taken into consideration before coming to this conclusion.

The experts at analysis have come to believe that both demand and price for oil barrels are likely to hit a low after the recession. However, there is nothing to be pleased about. Since, dealing with oil problems along with recession woes might be a huge task. Not only would the gulf countries suffer due to this oil setback, but the other nations too would be at a loss because despite slashed prices, they would not be able to derive benefit from the situation.

So, it is not the right way of reducing the oil consumption and measures should be taken to keep this setback in check. One ray of hope that emanates from this entire situation is the fact that the net oil consumption is likely to go down which can help as the natural reserves of oil are at the danger of being exhausted completely.

Will Recession Blow Be The Blessing In Disguise?

There has been a lot of speculation regarding the fact whether or not the oil industry would succumb to recession in the year 2012. While most of the countries are battling their own problems with recession, the trouble with oil might just prove to be the last straw. Whether or not the thesis turns out to be true is a tale that shall only unfold with time, however, right now the situation is not extremely bright as the prospects do not look to be very promising as far as the oil industry is concerned.

The gulf countries and those having huge natural reserves of oil are in deep trouble as oil has always been their main source of income. They have extracted huge amount of profits by exporting the precious oil reserves present in their country. However, with the supposed slash of demand as well as price that is likely to hit the oil market, things might not be so rosy for these countries anymore.

Although, one cannot assert that there would be total end to oil exports since the fact that oil is needed for a lot of day to day jobs makes keeping a certain supply necessary. Yet, there is sure to be a slash in the energy consumption rates of different countries. America has topped the energy consumption chart for too long consistently. 

The world was facing the danger of complete exhaustion of oil reserves in the near future. A lot of conventions have been called in support of cutting down energy consumption without much effect. With this drastic and unwanted slash in demand, one can hope for improvement in the indiscriminate oil consumption rate. Although, this is not the right strategy of cutting down oil consumption, yet it might prove to be a blessing in disguise.

However, for all this to happen first the thesis needs to turn true!!!

Recession, Falling Demand And Slashed Price

A lot of people and market analyzers are of the opinion that oil prices are likely to take a dip in 2012 as even the oil industry is sure to be affected by the hard hitting blows of recession. After analyzing a lot of points and details, the analysts have come to this common conclusion. They believe that along with the price, the demand for oil is also likely to dip drastically. There is a saturation point for all the industries and it seems that oil industries have reached the saturation limit.

After making unreasonable amount of profit for the last years, the oil industries need to remain a bit quiet for some time. It is not that there would be zero demand since oil is required for daily activities. All the vehicles and air planes need oil for running, so definitely all countries would be in need of oil. However, the rising demand is likely to fall down owing to the blows of recession. 

With lots of countries failing miserably at the financial market, bearing the oil expenses might be too much. This can lead to decrease in oil demand. As we have always known, demand and price are always related and so the experts of market analysis believe that this falling demand would hit the oil industry severely as the prices will be slashed accordingly.

What actually happens remain to be seen, however, so far the logic seems to be exactly right and there is no reason as to why this should not happen! One thing that can make the whole theory go awry is if the recession subsides easily and countries recover easily from this supposedly big recession, then the whole theory of low demand and price slash would fail entirely. But, seeing the bleak future, swift recovery from recessions seems to be a fairytale.

Harnessing Optimum Usage Of Oil

If you study the graph of oil prices for the past few years, you are likely to notice that the prices have increased more or less uniformly in the previous decade with a few exceptions here and there. Along with the increasing prices, there has been an increasing demand for oil as well. 

The need for oil has been on an increase incessantly. The reason for the same is the fact that with growing population, the needs and demands have to increase proportionally. Further, the fact that oil is used for all domestic purpose and almost all forms of vehicle need oil for transportation cements the growing demand for oil. So, the demand has been proportional and despite the hike in price, countries all over the world have been engaging in importing huge oil reserves to satisfy the thirst for oil use.

Oil finds its use in a lot of products and works. The utilities of oil are immense and as such countries which do not have ample reserves of oil need to import it despite the high price. However, all the countries need to ensure that they make optimum use of oil. There are various alternative sources available too and one should try to harness these alternative sources to minimize the use of the depleting natural reserve. 

If the natural source of oil gets exhausted, the world may suffer from a lot of problems since it takes a lot of years for the oil to be produced naturally. The world would come to a stop with the complete absence of oil and so it is mandatory that we advocate the sustainable use of oil for all the different nations.

United States of America has been a major consumer of oil continuously for the past few years. So, make it a point to implement strategies to help regulate oil usage. 

Whether Recession Would Affect The Booming Oil Industry?

If you analyze the market for crude oil prices, you would find that oil prices have been rising consistently every decade. Right now, the reports that are circulating in the market predict that 2012 will signal a low year as far as crude oil industry is concerned.  Experienced market analyzers have come to the common conclusion that in the year 2012, not only would the demand for oil and oil products drop considerably but so would the oil prices fall simultaneously as well. The main reason for this is supposedly the likelihood of global recession to hit harder this year.

Whether or not it truly happens is something we cannot conclude at the moment but the reasons are extremely logical and there should be no surprise at the prediction turning true. However, even if the oil prices keep hiking this year that too should be no surprise as with the growing population, the demands for energy and consequently oil products is on an increase as well. Naturally, the oil reserves are limited and if the demand remains high, price hike is a possibility. Just like a lot of time in the past, oil industry may defeat the odds yet again.

If it so happens, the gulf countries whose economy rely heavily on the oil export can breathe a sigh. However, if the experience of the experienced market analysts turns out true, these countries may suffer a lot of problems and they might have to look for better alternatives. So far, the crude oil industry has proved to be a great prospect with most of the people reaping a lot of money from this profitable industry. 2012 is the year of acid test. Whether or not the oil industry succumbs to the pressure of global recession would be an interesting thing to watch out for.