Overview of Oil Industry.

Overview Of Oil Industry.  

An Executive with a large national company said;
“It is simply in oil companies' best interests (profit-wise) for us to be as dependent as possible on foreign oil. With every supply disruption and every price hike in crude, oil profits go up”.

With that thought in mind, it might be naive to expect anything other than the message touted, by this excutive.

To paraphrase that message: Prices are going up, get used to it, and don't bother trying to do anything about it.

The current price of oil at approximately $60 per barrel is not only an indication of the volatility of the oil industry worldwide but also an indication of the potentially disproportionately high profits to be made by all participants in the industry in the years to come.

Volatility is a positive not a negative value that adds to the economic equation for the oil industry. It is forecast that oil will rise to $100 per barrel in the foreseeable future with varying predictable consequences to the world economy.

However, no one has said that a result like this would also add billions of dollars to the already inflated profits of the oil companies and those other participants in the industry. A predication no one wants to comment on but can already be seen by latest profit result – an all time record!

The rationalization the industry is currently going through is a change that will make them even more profitable than before. We will see fewer sites but bigger sites as more and more sites are closed and major sites are established. The three sites in question fit squarely into this “major” category. These are the sites of the future because at the end of the day the oil companies need retail outlets to sell their products.

It all equates to economies of scale for the industry and will result in a changed economic landscape forever. It is an economic juggernaut never before seen in the history of the industry and more importantly it is understood by...