Question

please answer this qustion :

What is happening to oil and gas prices? What does this mean for upstream, downstream, and integrated oil and gas companies?

Answer 1

Current the oil and gas prices are going through a cyclical uptrend. The gas prices that were at $30 per barrel in early 2016 have now risen to about $75/barrel. Therefore the oil price has more than doubled in the last two years.

For upstream companies who are oil producers, this is a good thing since they can cover all the costs of production and make profits.

For downstream companies, who are oil marketers, this is a bad thing since increase in oil prices reduces the demand from customers and many countries ask these downstream companies to take a hit and keep oil prices in control since most countries do not want inflation to increase.

For integrated companies, this does not change the scenario in monetary terms since they involve both upstream and downstream businesses and the good and bad effects negate each other.