Tuesday, January 20, 2015

Oil price drops, the reason, the impact and the future - Part2

This blog will focus on downstream impact.
Economist focus on its impact/little impact to renewable energy, but covers little on transportation and industry use.

Use of petroleum

  • Fuel (74% based on EIA) for transportation
    • Petrol - for cars (46%)
    • Diesel - for heavy machines (20%)
    • Kerosene - for jets (8%)
  • Non Fuel
    • Petroleum jelly
    • Lubricating oils
    • Plastics
    • Solvent
Use for transportation
  1. Auto industry
    • Electricity car - Less popular
    • Fuel efficiency car - Less popular
    • SUV more popular
    • Auto maker needs to be flexible to adjust to consumer and market
  2. Logistic industry
    • Fedex/UPS - Cheaper
    • Free shipping provided by Amazon - More
  3. Airline and airplane
    • Air ticket price - lower
    • More flight to new routes
    • Airplane to promote fuel efficiency - less poppular
    • Airplane buying - fewer/delayed
  4. Taxi
    • More savings for taxi drivers
  5. Agriculture
    • Production - cheaper
    • Shipping - cheaper
  6. Global trading
  7. Processed food
    • less shipping fees
    • cheaper plastic
  8. Customers
    • More money to spend from saving on gas
Use for industry
  1. Chemistry industry
    • Lower cost
  2. Manufacturing
    • Lower cost of chemistry
    • Lower cost of shipping
    • If not related to energy capital investment
  3. House building
    • PVC pipe, asphalt, shingles, paint and etc
    • interest rate will be low (from low inflation)

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