From the archives: Oil gluts, Great Depression style

Posted: December 30, 2014 in economy
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Too much oil flooded the world in the early-1930s, contributing to deflation

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C.R.

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During the Great Depression of the 1930s, massive oil discoveries in Texas, alongside falling global demand for energy, sent oil prices tumbling downwards. As we reported in 1931, that not only caused investors in oil firms to suffer huge losses, but also contributed to deflation around the world. Today, lower levels of inflation and bruised shareholders are once again the likely consequences of the fall in global oil prices seen since summer 2014.
The stock exchange: The oil outlook

Apr 25th 1931
The oil industry this year gas suffered what can only be described as a piece of bad luck. Its efforts last year to bring production into balance with consumption have been rendered abortive by the chance discovery of a prolific shallow oilfield in East Central Texas. Wells have been brought in twenty-two …

via Economic Crisis http://www.economist.com/news/business-and-finance/21637484-too-much-oil-flooded-world-early-1930s-contributing-deflation-oil-gluts-great?fsrc=rss

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