Formally known as the town of Ananias, Oil City was founded as a whistle stop along the Kansas City Southern Railroad. Early settlers were mostly fishermen, trappers, and farmers, while others worked in the timber industry or harvested fresh water pearls from mussels in Caddo Lake. This changed with the discovery of oil in 1905, when the town's population boomed and it became the first wild cat town in the Ark-La-Tex. Texas oil man Howard Hughes, the father of the famous Howard Hughes, persuaded the federal government to locate a post office there and is also credited with changing the town's name to Oil City. In 1911, Louisiana's first over water well, Ferry Lake No. 1, was completed over Caddo Lake, and this technology led to offshore production in the Gulf of Mexico.