Every evening, Wilmington daily commercial., 1921-12-24

Discussing tho future for the oil In
dustry both from the point OF view /
OF tho commodity itself and securities |
OF the producing companies. Roger w. /
Batson makes the following state |
ment:
Tho petroleum industry has been |
one OF tho last to respond 20 the |
contracting economic cycle. Since ear
Iy 1920 production has been well main |
tained, averaging far above war pro- |
portions. In fact, at the present time |
IL seems highly probable that tho to- |
tai output for 1921 will ruls the vi |
c,u!fy OF 20,000.000 barrels, over the
record figure OF 1920. AS production
has ignored fundamentals, ~ Is not
surprising that stocks have advanced
rapidly since the low point established
n year or so ago. In January, 1918,
stocks on hand Of crude petroleum
were about 150.000.o00 barrels. The end
Of tho year found stocks depleted,
ranging close TO the 1873, 900 900 barrel
level. During 1919 there was not any
material change and the low point in
stocks was reached in May. 1920, ap-
proximatcly 124,000000 barrels. The
recovery. however, has been rapid and
stocks today are not far from 10000
900 barrels, or the largest figure in
history.
The statistical position is extremely
weak and there are no indications Of
any material Improvement during the
winter months. The immediate future
constitutes a period during which
consumption Is at o. minimum, and
this factor must be counteracted by n
further marked contraction in output.
There has been a great deal OF prop
aganda relative 10 tho Mexican sit
uation, particularly as regards salt
water in many Of tho leading produc-
ing wells. I feel that this IS largely
the propaganda OF oil interests in the
endeavor 10 create buying atnlos-
phere. An official statement from
Washington indicates that there IS nc
marked basis for such a report ans
Mexican production today is in IN,
q increase.
Imports Of Mexican oil into thi
T. country this year have been the larg
!. est ever recorded. During the first tel
! months OF the current year import
\ exceeied 4.243,9 900 gallons q
2I against only 3,424, ,70i 900 in 1920, an
1885, $4,000 in 1919. Prospects favor
j continuation Of heavy imports Of Mex
u lean oil for some time TO come. More
nd over, the statement that the amour
Ie OF oil in Mexico is limited IS unfound
nj cd. Mexico will prove an importar
Is factor in the petroleum situation "a
n many years TO come. On the expor
I side Of the question the trend is dir
vii tinctly downward During the fir,
II ten months OF the current year export
g OF mineral oil averaged 2s41 ,584 0C
l. gallons as against 2,533, ,374, 900 dun
ing the same period sn 1920, and
X 990. $40 900 In 1919. Europe is not in
h position to buy on a war average an
N in all probability the trend Of c,
Of ports during the next year or so wi
be downward and not upward
The industrial readjustrnent is Z
no means connpiete. This includes pa
= tcularly the automobile industr
which still faces readjustment ar
% competition, and perhaps lower pric,
10 in 1922. Industrial activity will con
y, back only gradually. and the prime
10 pal sources Of outlet in petroleum al
'h by no means in q position TO buy O
An an extensive and expanding seal
IN Conservatism VIII certainly preva.
er Finally. looking at the price side
'o' the question, the trend of petroleum
on Mid Continent, Texas. and Pennsylv;
pc. mia. could not hold up against the e,
Ell cesslve supply, and during the fir
n quarter Of this year, broke material
ss. For example, Pennsylvania crude r
no acted from ss.1o in January 1921, TO
en- low level OF s2.25 in August. Since tn
time rTices have advanced approx
mately 100so, but as previously int
mated, stocks have advanced radica
lly, now 1870 more than at the Il
no point last year. The recovery h
DIS stimulated new dr1llings and this "a
NJ Will inevitably have a direct effe
nd upon the situation. The advance
ne petroleum has been entirely adverse
ny the statistical and fundamental po.
NJ. tion, which I feel has been due to
large ex ent to manipulation. que