Empirical Analysis Of Oil Industry Cycle And M&A Strategy

Crude oil is the most basic energy and chemical raw materials. It plays an important role in improving national economy and people's livelihood. Fluctuation of crude oil prices affects the pulse of the world economy. It also deeply influences the world's energy strategy and energy security. So it is important to research on the price trend of crude oil. Crude oil industry is a typical cyclical industry. The cycle is closely related to the macroeconomic environment and industry development level. Mergers and acquisitions is an important development strategy for multinational corporations. Its advantages includes avoiding trade barriers, controlling risk, synergies, reducing competition and controlling market. Oil industry has typical feature of periodicity. Since last century, in order to enhance the resource and finance situation, many sizeable oil companies such as Shell and BP, counted on the periodicity of oil industry to do large scale acquisitions.This paper is trying to analyze oil price(1996-2013) by using ARIMA model to establish a price model from the econometrics perspective. The calculation process is operated on Eviews. Also, this paper used the model to predict oil price from 2014 to 2020. It will illustrate the prediction of oil price and its fluctuation. Then this paper is trying to cut through from the financial situations and mergers and acquisitions of Shell and BP, to analyze the anti-periodicity strategy of these two companies. Finally, with the comparative analysis against Chinese oil companies, this article would provide some suggestions about the merger and acquisition strategy.