How did the national demand for oil affect the local businesses in Texas, and how did Texas oil discoveries affect the national oil market? As the Texas oil industry grew, so did related industries. Some companies began producing oil by-products such as petrochemicals. Others produced pipelines, barrels, and oil-field equipment. As these companies began moving into oil towns such as Houston, Beaumont, and Port Arthur, they further expanded the local economies. Some moved into small towns, quickly turning them into cities. In North Texas the town of Wichita Falls grew from 8,200 residents in 1910 to about 40,000 in 1920.The state income also increased from just over $101,000 in 1906 to $5.9 million in 1929, largely due to the oil
The industry is characterized by continuous cycles of spikes in demand, which precipitate an influx of actors, oversupply of oil, and eventual price collapse; the low prices discourage investment, leading to a supply shortage and again excess demand. Oil market actors – whether it is monopoly companies or cartels of countries – attempt to influence these cycles and shift the burden of price adjustment onto consumers, thereby maintaining their profit levels.
As the supply of oil grew in the pre- and post- World War II eras, vast reserves were found in developing countries and former colonies, which gave rise to an important dilemma over the ownership of the oil in the ground: Whom should own, and in turn, benefit, from the sale of the commodity – the entire population of the nation-state underneath which the reserves lie, or private enterprise and capitalists with the ability and skill to develop an oil sector for the domestic economy? As many former colonies gained independence in the period of the 1950s through the 1970s, and struggled to escape poverty, the governments chose the former option, and states took control of private. More than a century and a half after its discovery, oil continues to play an essential role in the global economy, despite fears that reliance on petroleum is fueling rapid climate change. Over the last decade, the price of oil has taken a roller coaster ride, rising steadily