Stocks Soar as Oil Prices Dive - February 1986

The U.S. stock and bond markets rallied sharpily in February as the world-wide prices of petroleum products continued to tumble. At a meeting in Vienna, February 4, oil ministers of major members of the Organization of Petroleum Exporting Countries repeated a call for cooperation between members and nonmembers of OPEC but took no firmer action.The ministers appeared willing to adhere to a strategy of keeping output high and forcing prices down, the object being to increase demand for oil. By mid-February, the prices for crude oil per barrel had fallen to the $15 to $16 range. Prices had been above $28 in November. The decline was seen on Wall Street as a promise of lower energy costs for corporations and lower inflation for consumers. The result was a buying frenzy. The Dow Jones industrial average closed above 1,600 for the first time, February 6, and needed only 15 more trading days to top the 1,700 level on February 27th.