Price Disruption in Oil and Gas Sector
In the current market, the oil and gas sector plays a critical role in economic development. It has been noticed that at global the sector is facing the key issue regarding price disruption. A situation in which market focuses on the functional aspects to meet the regular values. Along with this, diverse characteristic and rapid aspects are also being considered because market faces the issue in decline . In addition to this, it can be said that market disruption is also considered as the critical aspect in which panic conditions is being faced by the companies. In addition to this, it can be said that price disruption also creates a challenging circumstance for the organization in which overall outcome might get affected.
In the present study, the researcher will focus on the study of analyzing the factors which create a situation of price disruption. By having an improved focus on the factors which impact economic conditions and operational activities of oil and gas sector the issue can be addressed in an appropriate manner. Moreover, the innovation in the work activities is also essential so that issue can be resolved. The researcher will also focus on ways that might help in meeting objectives.
Rationale of research
What is the issue?
The key issue of the present report is a disruption in the pricing of oil and gas products. In the current market, the businesses are focused towards business expansion so that goals and objectives can be accomplished in the desired manner, but due to market fluctuations the issue of price disruption occurs and impact the working (Entrekin and et.al., 2011). It is significant for a business firm to understand the concept of price disruption and factors that cause working of the organisation.
Why is it an issue?
Oil and gas sector plays a critical role in the international economy, so any changes in pricing and working also impacts the economic system. Due to changes in work practice of oil and gas sector, the policies of other sectors also get influenced which impact the economic development in a diverse manner.
Manipulation in pricing is also a key issue in the sector which also influences the overall outcome in context to economic development. Along with this, there are some factors which create a disruption and manipulation in the industry. Many companies are not aware of the factors that impact the work style and create price disruption, so it is also significant to understand in the appropriate manner.
What could this research shed light on?
To light the research issue, the researcher will focus on the evaluation of diverse factors which plays the key role in working with oil and gas sector. By having an improved focus on the research, the key values of the sector will be analyzed so that reason behind price disruption can be analyzed in a critical manner. It will also allow identifying the factors responsible for price disruption in oil and gas sector.
Research aims and objectives
- To analyze the trend of global oil and gas sector.
- To develop understanding about the concept of price disruption.
- To assess the factors that are responsible for oil-disruption that takes place in oil and gas industry.
- To identify the ways through which condition of oil-disruption can be improved.
Significance of the study
Oil and gas price disruption is the major issue of economy and that have major impact on global growth and conditions. In this, such study will provide high level of assistance to scholar in analyzing the trend of such sector who is planning to conduct investigation on similar topic. Further, by considering the outcome of study both OPEC and non-OPEC countries can develop highly suitable and competent framework (Kelland, 2014). In this way, such study and its outcome are highly significant which in turn provides high level of assistance to scholar as well as oil and gas companies in making highly suitable framework.
In order to prepare thesis in a highly structured way five chapters have been included by scholar. Hence, in the first chapter of study researcher has clearly mentioned aims and objectives of study. Besides this, in such chapter researcher also presents significance and rationale behind conducting of study. Along with this, in the second chapter researcher evaluates the view points of different scholar in a critical way. By this, researcher prepares brief thesis which in turn helps in analyzing and evaluating data in the best possible way. In the third chapter, researcher identifies methodology which highly suits to the present study. Thereafter, in the fourth and fifth chapter researcher has analyzed and concludes all the findings.
After the introduction of the research, the next chapter is literature review. It forms an important section of the dissertation. In this section, information which the researcher has gathered from a range of secondary sources is presented. In addition to this, it can be said that statements provided by different authors in context to the subject will be evaluated. By having an improved focus on the literature review the research gape can be addressed in appropriate manner. Along with this, critical review of different authors documents is also being considered as a critical aspect for the study. In present study the literature review will focus on effective understanding of price disruption so that objectives of overall research can be accomplished. It will also provide an information in regard to factors that influence the price disruption so that goals and objectives can be accomplished in desired manner. By providing a highlight on the diverse values which are associated with subject. Moreover, the ways to improve the working of oil and gas sector will also be referred in appropriate manner. With an assistance of this, better understanding in regard to the subject can be evaluated effectively so that effective outcome of study can be attained.
Concept of price disruption
Price disruption is considered as a phase where business firm faces the issues in regard to pricing. It is significant for businesses to have proper understanding in regard to price disruption so that goals and objectives can be accomplished in desired manner. In addition to this, it can be said that price volatility is being a critical aspect which influences overall outcome effectively. A situation in which price volatility increases in diverse way the financial issues are occurred in the sector. It increases the operational cost of overall process which influences the stability aspects within oil and gas sector. According to (Entrekin and et.al., 2011), a global financial crisis in oil and gas sector also occurs due to price disruption. It also enhances the circumstances that demand high level of changes so that sustainable aspects can be promoted effectively. Price disruption is considered as critical because it impacts the effectiveness of overall processing in diverse manner. In the current market, the oil and gas sector plays a critical role in economic development. It has been noticed that at global the sector is facing the key issue regarding price disruption. Gregory, Vidic and Dzombak, (2011) has stated that a situation in which market focuses on the functional aspects to meet the regular values. Along with this, diverse characteristic and rapid aspects are also being considered because market faces the issue in context to decline. In addition to this, it can be said that overall outcome in context to the economic conditions are not effective due to high level of price disruption. Overall trade activities also get influences which create instability within business. Market disruption is also considered as the critical aspect in which panic conditions is being faced by the companies. In addition to this, it can be said that price disruption also creates a challenging circumstance for the organization in which overall outcome might get affected. It has also been contended that by having an improved focus on the disruption concept the business firm can improve work conditions.
Factors that impact price disruption
Inkpen and Moffett, has contended that there are number of factors which might impact the working of oil and gas sector and causes price disruption. One of key factor is costing of diverse operational activities. It might affect the overall outcome and create issues. If company is having appropriate understanding about further working in context to economic values then further issues can be overcome. It has been noticed that any kind of changes in the transportation cost might increase the overall cost. It causes the price disruption and impact the overall working of organisation. Kelland (2014) has asserted that Oil and gas sector plays a critical role in the international economy, so any changes in pricing and working also impacts the economic system. Due to changes in work practice of oil and gas sector, the policies of other sectors also get influenced which impact the economic development in a diverse manner. In addition to this, it can be said that pricing need to consider as a critical aspect for sustainable development. Along with this, changes in international aspects like political differences are also critical aspect which might affect the overall outcome. If political aspects are not properly maintained then it will influence the working in diverse manner. Moreover, the overall changes in work aspects are also a factor which might affect the overall outcome.
Ways to improve working of oil and gas sector
Memmott, Craze, Waser and Price has contended that there are number of ways that can be employed by businesses in order to improve the working of oil and gas sector. It has been noticed that by having application of new standards in context to operations so that cost can be controlled. With an assistance of this, oil and gas working can be improved. Improvement in pricing strategy might help in overcome the issue of price disruption. Along with this, it has been noticed that improvement in operational activities is also significant because it helps in sustainable development. Transportation standards also need to be improved so that goals and objectives can be accomplished effectively.
Inductive and deductive are the main two approaches which in turn helps researcher in finding suitable solution of the issue. Researcher needs to select approach of the study by taking into consideration the type of investigation undertaken (Cuomo and Massaro, 2016). To identify the factors which may cause of price disruption in the oil and gas sector mixed approaches of research has been used by scholar. Moreover, in this both qualitative and quantitative investigation type has been selected by scholar. In this way, by addressing the issue according to such approaches researcher can present the fair view of study.
Philosophies of the research can be divided into two parts such as interpretivism and positivism philosophies. Such philosophies clearly provide deeper insight to the researcher about the way in which data will be gathered and analyzed by scholar. Hence, in this, data had gathered and analyzed by scholar through the means of both interpretivism and positivism philosophy.
Qualitative, quantitative and mixed are the main two research types which can be used by scholar for assessing the factors that are responsible for price-disruption occurs in oil sector. In the present study, mixed approach has been used by scholar. On the basis of this aspect, qualitative investigation has been conducted by researcher to analyze qualitative facts. Further, quantitative tools also have been applied by scholar to determine solution from secondary data gathered from varied sources. Hence, by considering all such aspects mixed approach has been selected by scholar.
Data is the main input which in turn helps researcher in finding suitable solution of problem is going to be investigated. In this, primary and secondary are the main two types of data which can be gathered by scholar for analyzing the extent to which different factors have influence on the prices of oil and gas sector. In the present study, both primary and secondary data has been gathered by scholar to assess the major factors which have high level of influence on the changes that take place in oil and gas sector.
Thus, survey has been conducted by researcher via questionnaire on 5 economists of UK. Moreover, economists have better knowledge regarding the level to which one factor has impact on another. Further, secondary data in relation to oil prices, institutional investment and exchange rate has been gathered from the period of 2007 to 2016. Thus, by making analysis of such data outcome researcher has identified the factors that closely influence the price level of oil and gas industry.
For organizing and getting highly valuable information from survey researcher is required to select suitable sample size. Moreover, it is not possible for researcher to conduct investigation on whole population. In this regard, by taking into account simple random sampling 5 economists have been selected by scholar for conducting survey in an effectual way. Thus, by taking reviews from economists research has assessed the factors due to which oil prices fluctuate.
Data analysis technique
Data analysis is the process of recording and analyzing data in a highly structured manner through the means of logical and statistical tools. To analyze the gathered data set both thematic and SPSS tools have been applied by scholar with the aim to assess suitable solution. Hence, by preparing several themes views of respondents have been analyzed by scholar. Beside this, SPSS tool such as regression has been applied by scholar to determine suitable outcome or solution from secondary data gathered relation to exchange rate, oil prices and institutional investments. In this way, by testing hypothesis and evaluating the respondents view researcher has presented the major factors that have high level of impact on oil prices.
To raise the effectiveness of study researcher has followed all ethical aspects to the significant level. Hence, before sending questionnaire to the respective economists scholar has taken permission from them. This aspect clearly shows that research has not compelled anyone in relation to filling of questionnaire. Further, researcher has clearly presented the specific section of references and made proper citation of related source. Along with this, researcher has also maintained high level of confidentiality of data gathered from several economists. For this purpose, researcher has made use of high-tech software’s and techniques. Hence, all these aspects clearly present that ethical rules and regulations have been followed by scholar to the significant level.
In the present study, there are some limitations which closely influence the significance and outcome of study. Moreover, in this survey has been conducted by scholar only on 5 economists due to having limited time frame. However, with the aim to overcome such limitation to a great extent global data in relation to exchange rate, institutional investment and exchange rate been gathered by investigator.
From the above report, it has been concluded that there are several factors which have high level of impact on the prices of oil and gas sector. Hence, demand and supply, production, exchange rate, institutional investment, economic conditions etc. are the major factors that have high level of impact on oil prices. It can be revealed from report that if supply is lower than demand then it may result into increase in oil price level. In addition to this, technical advancement which takes place in the business environment also influence the demand aspect of people and thereby price level. Moreover, now people make focus on purchasing the product and services which contribute in the sustainable environment. It can be seen in the report due to high level of awareness of people towards sustainable environment and increasing usage of CNG price level is affected to the large extent. Besides this, it can be inferred that economic condition such as inflation and deflation are also responsible for disruption that takes place in oil and gas sector.
Further, it has been articulated from primary data investigation that global oil and gas sector is facing high level of issues in relation to the maintenance of price level. It can be seen in the report that large number of economists said that by employing new standards and rules companies which are operating in oil and gas sector can deal with the issue of oil disruption. Along with this, it can be summarized from report that changes take place in the political rules and regulations closely influence the price level of oil and gas sector. It also has been stated that global financial crisis situation occurred in 2007-08 also had placed negative on the prices and activities of oil and gas sector.
It can be presented from the outcome of oil and sector that highly lower relationship exists in the oil gas prices and investment which is made by institutional investors. In contrast to this, moderate level of relationship takes place in the oil and gas prices and exchange rate. Hence, fluctuation which takes place in exchange rates does not have major impact on price level of oil and gas sector. Hence, all the above mentioned factors are collectively responsible for disruption that takes place in the prices of oil and gas sector.
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