Political And Social Issues Associated With Reduced Oil Prices Research Proposal Examples

Introduction

I am interested in researching the way in which can sustain our standard of living, or lifestyle design as oil prices continue to fall. While Americans are generally enjoying the lower fuel prices, and the way it alters their budget, other countries are markedly more effected by the failing oil prices and what that means for their national economy.

It is possible that oil prices are falling for purely political reasons. There are those that believe that oil prices may have been reduced purely to impact specific countries both Russia and Africa are being crushed by the falling oil prices which could limit the wartime activities on those fronts. Also, America has increased production and slowed importation. This may be a direct reflection of the American political climate, and a public outcry for lower gas prices and less global fuel dependency.

Recent phenomenon oil prices

Recent oil prices have been falling dramatically. More specifically, the barrel has dropped more than half in the last seven months, settling at a mere $53 a barrel. However, on February 3rd, barrels gained just over $2 a barrel leading some analysts to believe that the price per barrel may have bottomed out, and that they may continue to gain from this point on. Most experts agree, however, that there are several “powerful reason to believe the rise will not last.”

Correlation between market performance and oil prices:

Generally, people had cut back on gas usage because the cost had gotten so high. Now, with gas prices down, some analysts say that the market is responding and sales have begun a gentle increase. More specifically, one analyst noted that “One reason is that the global growth market is sluggish, with companies and households cutting back on investment and consumption. While US rig counts are falling, US domestic production is still rising, he says, and there is no sign of Opec lowering its production target, with some members even increasing their output (The Week, 2015).”

Reduction of adverse effects

American frackers may be the most affected by the sudden shift in production and demand. They took out substantial loans which will have to be repaid, and may need government lending and refinancing to handle the burden of their debt. In other countries, where the government depends on oil exports, social programs are likely to be reduced. The hope is that with the need for foreign aid, they may become more amenable to global pressure for them to change certain social policies and political positions.

How Will Kuwait Deal With Lower Oil Prices

Kuwait would like to use lower oil prices to push America’s production down and weaken the value of their oil, so that they are forced to re-implement importation policies, and return to foreign oil dependence.

Lessons for the Future

For this section I want to research what steps could be taken in the future to stabilize oil prices, and what the best target oil price is for oil. It needs to be low enough to stimulate spending and high enough to support the industry’s movement.

References:

"Oil Price Shoots Up: Has Market Finally Bottomed Out?" The Week UK. N.p., 3 Feb. 2015. Web. 03 Feb. 2015. <http://www.theweek.co.uk/business/oil-price/60838/oil-price-shoots-up-has-market-finally-bottomed-out>.