"Also to maintain market stability". And as Dr. Phil would ask: "How's that working for you?" The only truly effective cartel to stabilize prices was run by the Texas Rail Road Commission. From the after WWII to the early 70's prices slowly declined but in a very controlled mode. See chart:
http://www.macrotrends.net/1369/crude-o ... tory-chartWhich is remarkable given this was a boom time period in Texas when some of the most prolific oil trends of all time were developed. It controlled oil production rates by using the proration regulation: the TRRC would monthly set the % of oil every well in Texas. And it controlled the global price of oil because at this time Texas was THE source of oil exports for the entire world. The law developed out of the boom brought on by the discovery of the giant East Texas oil field:
"The State proration regulations of the East Texas Field are based upon the Oil and Gas Conservation Act enacted in 1919 by the State Legislature under authority of a constitutional amendment voted August 31, 1917, which required the Legislature to pass laws for conservation and development of the natural resources of the state. The Oil and Gas Conservation Act of 1919 prohibited production of crude oil “in such manner and under such conditions as to constitute waste” and the Texas Railroad Commission was charged with doing “all things necessary for the conservation of oil” and with establishment of “such rules and regulations as will be necessary to conserve the oil and gas resources in the state.”
To conserve the oil and gas resources: read to not sell those resources cheap. Violations of the proration regs in the East Texas Field led the governor to declare marshal law, sent in the state guard, arrested some operators and shut the entire field in.
But that came crashing to a halt just as US oil production peaked, domestic consumption boomed post war and the giant ME fields were being developed. But the TRRC still has the authority to reduce the production of every oil well in the state: each month the commissioners set the allowable percentage. Since the early 70's it has been set every month at 100%.