ABSTRACT
The history of the petroleum business has been one of volatility and efforts to overcome that volatility. The early market in the 1870s included a very active futures market, 1 unregulated and yet fairly efficient, reacting primarily to the news of new fields being discovered or old fields going dry. Both happened often and unpredictably enough to contribute to severe boom and bust cycles in the industry. Additionally, because of the low barriers to entry, the industry tended to overbuild during boom years, worsening the down-cycles.
