rrels a day (Michelouds).The area quickly boomed and the modern oil industry was born("History of Oil Use").
             As reliance on oil grew, the price of oil began to have the power to effect individuals. The price of oil has to be sold at an equilibrium of supply and demand to be beneficial to individuals. The supply and demand for oil depends upon many variables. These variables cause changes in the equilibrium price. Crude oil prices reacts to the balance of demand and supply in the short term, and the rate of investment in the long term("History of OPEC").
             Supply and demand variables are what gave oil the extreme power it has today. One of the first demand variables that affected the oil industry was the fact that it was a substitute good for other more expensive product. Since oil, was cheaper the demand for oil increased and this in the short run led to more sellers entering the market. The price of oil was cheap in comparison to substitutes, but as more and more sellers entered into the oil industry and more wells were being dug and the price began to decrease from $6 a barrel to $1.80 in 1876 due to the increase in the supply of oil. The increase in supply was due to the entrance of more sellers, supply and demand for oil were elastic because production costs were still relatively high and people were not willing to pay more for oil than its substitutes.
             Another variable that affects both demand and supply is improvements in technology. Oil in the late 19th century was still being used primarily as kerosene for lighting, but as the development of technology of the automobile and the airplane continued, the demand of oil started to dramatically incr
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