Oil Crisis

I learned a lot of things I did not know by reading the book on oil I mentioned in the Introduction post:

1. During the 1973 oil crises there was sufficient oil in the U.S., even though there was a shortage. However, the federal government had instituted an allocation program. Under the program, oil could not be moved from one part of the country to another part without submitting for permits and obtaining permission from the government. Without this government program, the oil companies could have moved oil quickly enough to meet any immediate shortage in any part of the country. The inefficiency under this government allocation program was such to cause a lot of the gas lines experienced at that time. In addition, consumers rushed to the gas stations to fill up as soon as the news reported any shortage. Also, people filled up on gas every chance they had so not to be caught short later on.

2. The rise in oil prices in the 70s led to increased exploration and a glut of oil by the mid-80s, especially from the North Sea and Alaska, which led to a dramatic decrease in the price of oil from around $40 a barrel to as low as around $6 a barrel.

3. Oil has had a long history of wild fluctuations depending on supply and demand in the market.