Arizona republican., 1921-12-25

and Mexican production today is on the increase.
 Imports of Mexican. oil into this country this year have been the larg- . est ever recorded. During the first ten months of the current year im- ports exceeded 4,243 932 900 gallons as against only 3,424.701, 900 in 1920, and 1867. .332. 900 in 1919. Prospects favor a continuation of heavy i'm
 ports of Mexican oil for some time to come. Moreover, the statement that the amount of oil in Mexico is limited, is unfounded. Mexico will
 prove an important factor in the
 petroleum situation for many years
 to come. On the export side of the question the trend is distinctly down
 war1. During the first ten months of the current year exports of min eral oil averaged 2.341, ,5S4, 900 gallons as against 2,533,374,000 during the
 same period in 1920. and 1889, ,54o, ,006
 in 1919. Europe is not in a position
 to buy on a war average and in all probability the trend of exports dur ing the next year or so will be down ward and not upward.
 ''The industrial readjustment Is by
 no means complete. This includes particularly the automobile industry, SLAll AaNtS Itd0JQSAIAthI anu competition, and perhaps lower prices
 in 1922. Industrial activity will come
 back only gradually, and the prin- cipal sources of outlet in petroleum
 are by no means in a position to buy 1 on an extensive and expanding scale l Conservatism will certainly prevail l Finally, looking at the price side of l the question, the trend of petroleum, Mid Continent, Texas, and Pennsyi- vania, could not hold up against the
 excessive supply, and during the first quarter of this year, broke materially. | For example Pennsylvania crude re- | acted from S6.10 in January 1921, to a low level of $2.25 in August Since l that time prices have advanced ap- | proximately 100 per cent, but as previously intimated. stocks have ad- | vanced radically, now 39 per cent
 more than at the low point last year. l The recovery has stimulated new drillings and this fact will inevitably | have direct effect upon the situa- ton. The advance in petroleum has | been entirely adverse to the stat 1 istical and fundamental position, | which I feel has been due to a large l extent to manipulation. I question whether petroleum can hold its
 present level. There is a marked pos 1 sibIlity or a price reaction during the winter months unless there is a | drastic curtaiment in production, 8
 feature that seems improbable at this | time. The principal by-products
 such as gasoline, kerosene, lubric-
 ants, etc. are also in the same cat l egory as crude petroleum, and should
 be regarded accordingly.
 T do not see how the securities ot
 the producing companies can escape this same readjustment. From high | average price of 700 reached a
 1920 the stocks of the oil companies | came down to around 400 and arc
 now up to about 525. At the present 1 time they are less than half way
 back to the 1913-14 average level ot | 300. can see no reason for any
 broad upward movement in oil stocks | until they have been more thoroughly readjusted.
 ''The general business of the coun- l try at large as reflected to the Bab- | soncraft index maintains its high point for the year gained last week | General business now stands Il per cent below normal"