The price of bulk oil, usually quoted in US dollars per barrel. The real oil price drifted downwards in the post-war period, until in 1973-4 the Organization of Petroleum Exporting Countries (OPEC) increased it by a factor of four. This set off a severe bout of worldwide inflation, and the real price of oil since the 1970s has fluctuated substantially, illustrating the tendency of price-fixing cartels to be unstable: each member has an incentive to raise output and several OPEC members have done precisely this when in need of additional income. A significant drop in oil price in 2014-16 is linked to the advances in alternative fuel technology, such as fracking.
|Reference: Oxford Press Dictonary of Economics, 5th edt.|