when did the oil prices start to drop
Price of oil Because of oversupply and lack of agreements between oil-producing countries members of the OPEC (Saudi Arabia in particular, which pumped at world's records) and also because of lack of coordinated efforts between OPEC and Non-OPEC countries (Russian being a big player, refusing to reduce production) the price of oil fell rapidly in 2015 and continued to slide in 2016 causing the cost of WTI crude to fall to a 10-year low of $26.55 on January 20. The average price of oil in January 2016 was well below $35. Oil did not recover until April 2016, when oil went above the $45 mark.
1970s energy crisis The crisis led to stagnant economic growth in many countries as oil prices surged. Although there were genuine concerns with supply, part of the run-up in prices resulted from the perception of a crisis. The combination of stagnant growth and price inflation during this era led to the coinage of the term stagflation.[5]
Economics Theory and observation set out the conditions such that market prices of outputs and productive inputs select an allocation of factor inputs by comparative advantage, so that (relatively) low-cost inputs go to producing low-cost outputs. In the process, aggregate output may increase as a by-product or by design.[37] Such specialization of production creates opportunities for gains from trade whereby resource owners benefit from trade in the sale of one type of output for other, more highly valued goods. A measure of gains from trade is the increased income levels that trade may facilitate.[38]
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