Vol. 6, Issue 6, Part E (2020)

Abstract
Oil markets have experienced frequent episodes of boom and bust, ever since oil was produced in large commercial quantities in Pennsylvania back in 1859.This paper discusses how change in oil price effects the global economy because oil prices have considerable effects on macro economy of both developed as well as developing countries. These volatilities can affect economic growth through affecting cost of production, consumer spending, and exchange rate that is in turn affect international trade. In this paper the history of the oil industry with a particular focus on the events associated with significant changes in the price of oil. While oil was used much differently and was considerably less important economically in the nineteenth century than it is in this century, there are interesting parallels between events in that epoch and more recent developments.