Tui Bus 305 Case 1

TUI University

BUS305 Competitive Analysis and Bus. Cycles

Jeffrey M. Roseman

20 January 2012

MODULE 1

Supply and Demand and Current Worldwide Oil Situation

The changes in supply and demand in this day and age greatly affect ever changing oil prices in our country and other countries across the globe. For decades, shifts in the economy of our country have caused oil prices to soar to an almost unattainable level for most Americans, while the unemployment rates are at record numbers, and the housing market crashes almost overnight. These are just a couple of examples, and catalysts of oil price rapid fluctuation.

I can remember a time, back in the mid 1990’s when a gallon of gas was a $1.00 in most states, and is some, and few pennies less. Clinton was President, the Gulf War was a complete success, and our economy was booming. The U.S. had the confidence of most of the World’s leaders, and stocks were trading. We had defended Kuwait, which was a country, rich with oil, and the United States capitalized. Citizens were working, taking vacations, and buying automobiles, and our unemployment rate was at record lows in decades. What did this thriving time mean for oil import and export, and the demand for crude, and gasoline. This was a time, because the economy was so good, that there was more of a demand for oil. With autos flying off showroom floors, and major companies expanding operations across the land, oil was in surplus, and it was easy to maintain low prices. There weren’t any flex fuel or hybrid vehicles on the streets. Just gas guzzlers and oil makers profited.

Today, there has been a major shift in supply and demand. SUV price drop because of less demand, and oil prices soar as a result of war, and auto makers making vehicles that are less dependent on fuel. Oil makers are still making plenty of money and producing and supplying more oil than ever before because of the demand. It is really quite simple. The American thought process is to...