Here's a summary for you from an AI robot:For you:
My post sets forth that the primary cause of low (and very low) oil prices in the 1980s was the following: "The reality is that energy prices declined in the 1980s due to massive cheating on production quotas by OPEC members." This professor ignores that completely, and claims that lowering demand drove the oil price crash of the 1980s. (did you live in Texas in the 1980s....?)
Your vitriolic personal attack post is about some other point--a point that I do not make.
"In the 1980s, OPEC members frequently cheated on their production quotas, which contributed to the oil price crash. This was due to a number of factors, including:
- Incentives: It was individually rational for members to cheat and produce as much oil as possible.
- Lack of punishment: OPEC did not punish members for non-compliance.
- Oversupply: Non-OPEC nations were supplying most of the West's imports.
- Saudi Arabia's role: Saudi Arabia was the biggest producer and had the most unused production capacity.
- Saudi Arabia's actions: Saudi Arabia changed its pricing structure and began producing at full capacity to punish other OPEC countries.
- Price war: The price war was a result of Saudi Arabia's actions and the realization that Saudi cuts were encouraging high-cost production.
- Price collapse: The price of oil fell to as low as $7 per barrel.
What was the result?
- OPEC's share of the world market dropped to less than a third in 1985.
- The era of contract oil prices ended.
- The 1987 Dow crash was foreshadowed by a tumble in oil price. "
