Gas and oil prices Essay Example for Free

Gas and embrocate equipment casualtys look forOil and Gas PricesOil and Gas 2 at that place are m all issues that cause the exist of inunct and gas to increase. The main(prenominal) contributing issue to the increasing cost of oil and gas is supply and demand, when demand is greater than supply, the price of oil and gas will increase. The factors that come to supply include increased demand, problems with refineries and pipelines, and disruption to supply or threat of disruption to supply.With the increased demand for oil in the United States and other countries such(prenominal) as India and China the extra demand for oil has put enormous pressure on available oil reserves. The Energy Information Administration stated, If refinery or pipeline and/or reductions in imports cause supplies to decline unexpectedly, throttle inventories (stocks) may drop rapidly. This may cause wholesalers to bid higher for available supply over disquiet that future supplies may not be adequ ate (Energy Information Administration, 2008, para. 9). With this in mind, the other underlying factors that affect supply are disruption to supply or threat of disruption to supply along with The giving medication of Petroleum Exporting Countries (OPEC).The Organization of Petroleum Exporting Countries is an organization of oil producing countries which produces over 40% of the grounds crude oil and has two-thirds of the worlds oil reserves. This organization was formed in 1960 to put the supply of oil and to some extent, the price of oil. The organization includes Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, and Venezuela. Mouawad, J. stated, The cartel has refused to pump much oil, fearing that any hasty move would lead to plummeting oil prices (Mouawad, 2008 para. 19). With OPEC refusing to increase production and reserves being depleted, a contravene or threat of conflict can be an issue of concern.If there is a conflict or threat of war or conflict with the chance of a disruption in production in an oil producing country will cause oil and gas prices to increase. The most recent conflict that discontinue production is the attacks on the pipelines in Nigeria that caused Royal Dutch Shell to decrease exports delinquent to damaged pipelines. some other recent conflict was the exports from Iraq being disrupted by Turkish and Kurdish forces.With these issues increasing the cost of oil and gas, consumers have to deal with the effect as well.With oil and gas prices steadily increasing with no suspension in sight, consumers have had to sell with the many adverse effects of high oil and gas prices. There are many adverse effects of increasing oil and gas prices thatconsumers have to cope with such as a change in lifestyle, change in shop habits, and some drastic effects that include not paying utility or vehicle bills leaving some consumers with little options for get to excogitate. With the increasing oil and gas pri ces, consumers are left with less expendable income.Consumers are changing their lifestyle, shopping habits, and driving habits. Consumers are left changing their lifestyle by staying home more therefore, they are ingest out at restaurants less, cutting back on entertainment such as nights out at the movies. Consumers are finding themselves combining trips for errands which include paying bills, medical trips, and grocery shopping. Consumers are also devising the decision of not travel long distances for vacation or decided on not victorious a vacation altogether.These effects have consumers looking for alternative ways of travel and more fuel economical vehicles. Mouawad, J., Navarro, M. stated, Americans have started trading their gas guzzlers for smaller cars, making fewer trips to the mall and, wherever possible, ride public transportation to work (Mouawad Navarro, 2008, para. 7). These effects have consumers making adjustments to how they shop.With consumers being left w ith less spendable income they have changed their shopping habits by shopping online to save money on fuel by not leaving their home to go shopping. Consumers are finding themselves looking for and purchasing sale items whenever possible, purchasing pile brand items instead of name brand items and shifting their automobile purchases towards vehicles with high fuel economy and away from the large SUV type vehicles which get less gas mileage. Some consumers have traded their SUVs for smaller more fuel economical vehicles like the hybrid models and some have bought motorcycles.With consumers in large suburban areas dealings with these effects, rural America is struggling with the effects of the increasing cost of oil and gas. In rural areas such as Mississippi, New Mexico, Montana, Wyoming, and North and South Dakota where consumers incomes are much lower and jobs are scarce, who mostly take care on pickup trucks and vans for transportation are going to extremes in order to cope w ith the high cost of gas. These effects have rural consumers borrowing money from their employers to help pay for the gas to get to work resulting in less money on payday, and changing jobs for shorter varys. Some rural consumers find themselves hiring friends and family to drive them for errands due to their family or friends vehicle getting better gasmileage, requesting buyouts from their employers, not making electric or vehicle payments, and some have gone as far as giving up meat so they can buy fuel.Indealing with these kinds of effects, rural consumers have made the difficult decisions of changing their job for a shorter commute or moving closer to urban manufacturing jobs.Krauss, C. said. Dick Stevens, president of Consolidated Catfish Producers, said that 10 workers walked into his office and volunteered to take a buyout rather than continue commuting from Charleston, Miss., 65 miles away (Krauss, 2008, para. 24). With consumers continuing to cope with the effects of the e ver increasing cost of oil and gas, businesses, both large and small are seek to adapt to the changes.