Oil and natural gas are two of the most commonly used raw materials available. When it comes to numbers and dollar values, the industry is considered to be one of the largest sectors of the economy worldwide. Every day billions of dollars are generated through the oil and gas business, and petroleum-based products are in high demand.
The oil and natural gas industry is a great supporter of employment opportunities. Job growth and availability is a key component of success within the economy, and as the industry continues to thrive, it opens up various employment opportunities. Consider the operation of the oil and gas industry overall; the process of producing involves many different moving parts. For example, labor-intensive jobs alone, like drilling crews, mechanics, and operators are all essential in the process. In general, the oil and gas industry is responsible for supporting roughly 10 million jobs.
Production and manufacturing costs are heavily influenced by the price of oil and natural gas. An increase or decrease in pricing can significantly impact the domestic economy. Low oil prices generally mean lower costs for transportation. Additionally, lower oil prices can lead to a significant decrease in manufacturing costs as well. An increase in price tends to add to the cost of conducting regular business. “Conversely, high oil prices add to the costs of doing business. Whether it is higher cab fares, more expensive airline tickets, the cost of apples shipped from California, or new furniture shipped from China, high oil prices can result in higher prices for seemingly unrelated products and services.”
Investment and banking sectors within the economy are also impacted by the oil and natural gas industry, specifically when it pertains to pricing. Numerous companies are directly involved with the oil industry, whether it relates to drilling and servicing oil wells. Many of these companies tend to finance their operations. When oil prices drop, and wells aren’t as profitable, it can run servicing companies and their investors into financial trouble.
The prices of oil and natural gas can significantly impact the economy. High prices can lead to an increase in employment opportunities, while lower prices can hurt servicing companies but benefit the manufacturing industry with low fuel costs.