The problem which the oil and gas industry is currently experiencing is similar to the issues confronting most industries today—volatility. The year 2018 has been one of the most economically volatile years on record. At present, oil prices are rising, although they are considerably lower than their record highs of 2011. Oil and gas companies must find ways to continue to exploit current price trends while hedging their risks.SWOT
Strengths
The great strength of the industry is that much of the world remains dependent upon oil. Recent oil prices are expected to remain in place in the short term but over the next ten years they are predicted to rise (Biscardini, et al., 2017). The world continues to industrialize at a rapid pace, likewise driving the level of demand.
Weaknesses
However, most oil companies remain historically very expensive to operate, both in terms of supply chain delivery as well as processing petroleum; cost containment has historically proven difficult (Biscardini, et al., 2017). The industry is a global one, and while this means that on one hand hedging risks may be possible by focusing on high demand in areas of the world when demand is sinking in other areas, this also makes the industry very vulnerable...
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