When overproduction occurred, it create a situation when the stock of the products far outnumbered the amount of people who are wiling to buy it. As a response, sellers started to reduce the price of the oil in order to make consumers more interested to buy it.
This caused a massive fall in oil price during the 1930s. Before the over production, the cost of oil at that time was around $ 1.88 / Barrel. After the overproduction, it became around 65 cents per barrel .
