Market Overview

This Day In Market History: OPEC Formed

Share:
This Day In Market History: OPEC Formed

Each day, Benzinga takes a look back at a notable market-related moment that occurred on this date.

What Happened

On this day 58 years ago, Iraq, Iran, Kuwait, Venezuela and Saudi Arabia joined to form the Organization of the Petroleum Exporting Countries.

Where The Market Was

The Dow Jones Industrial Average closed at 605.69 and the S&P 500 traded at 55.44. Today, the Dow is trading at 26,145.99 and the S&P 500 is trading at 2,904.18.

What Else Was Going On In The World

In 1960, John F. Kennedy became the youngest American president at 43. The U.S. officially entered the Vietnam War by sending 3,500 troops overseas. A gallon of gasoline cost 25 cents.

OPEC’s Beginning

The idea behind forming OPEC was to make sure petroleum policies among the top global producers were coordinated and beneficial to all members. OPEC made its first major coordinated move in the early 1970s when the organization decided to raise the price of crude out from around $3/bbl to roughly $12/bbl as a result of the U.S. support of Israel during the Arab-Israeli conflict.

The 1970s embargo drove the U.S. and other oil importers to increase their efforts to invest in domestic production. By the late 1980s, global overproduction of oil resulted in a supply glut that drove Brent crude prices below $9/bbl.

Throughout the years, OPEC has enacted production quotas and cuts with varying degrees of success in an effort to balance the global oil market. Today, OPEC membership has grown to 15 countries which combine to account for about 44 percent of global oil production.

Related Links:

This Day In Market History: Gillette Buys Duracell

The Best Performing Sectors, Assets In The First Half Of 2018

Posted-In: OPEC this day in market historyEducation Commodities Markets General Best of Benzinga

 

Related Articles

View Comments and Join the Discussion!

Cowen: Vans Will Boost VF Corp's Overall Operating Margins

BBVA Leads The Charge With Fintech, Blockchain Technology