The Washington herald., 1921-03-06

cial need. rather than any essential
weakness In the situation as a
whole. Mr.. Prizer says on the out
look for the oil industry In 1891:
up to within the past sixty days
the petroleum industry has been
taxed to its utmost to take care of
the demand for its products Of
every character. Reserve stocks OF
crude oil were being rapidly cut
Into, and the real apprehension OF
the industry was adequate supplies
Of crude. IL the insistent demand
continued and increased.
There has come some letdown in
general industry as a whole. which
Is reflected In the petroleum indus
try as well as In other lines. The
result has been some cessation Of
demand. causing some surplus Of
stocks As relates to certain petro-
leum products, with a consequent
recession in price therefor.
This situation Is in no sense a
misfortune to the petroleum indus
try. 1t permits of the accumulation
of a proper crude oil reserve in stor-
age which was hitherto impossible
II also permits Of the accumulation
Of a reasonable supply of finished
products as against the demand
which will surely come In a COM
paratively short time.
Steady Increase In Demand.
THE increase In consumption Of
petroleum the world over Is steadily
upward, and while this increase may
not be uniform month by month.
each year finds the total worlds re-
1ant
preceding year. It Is. therefore. en-
total consumption during 1891 will
exceed that of 1920.
Europe, as a whole. Is without
adequate reserve stocks Of petro-
leum. Due to the extremely high
dollar exchange, European coun-
tries have been forced to buy only
to cover existing unavoidable need.
In point Of fact, there has been an
undue restriction of consumption OF
various essential grades because Of
the high cost. An increase of pur-
chase Is looked for simply for the
reason that foreign industry cannot
function without its proper supply
Of petroleum.
During all the war period. the
prices of all grades of petroleum
products have not advanced in like
proportion to the advance in prices
Of other commodities. The in
dustry, in spite Of the enormous
amount of new capital required to
carry on its legitimate operations,
has not exacted more than normal
return on investment. For this rea-
son, any great decline in the prices
Of petroleum products cannot be
looked for. The present surplus Is
a temporary matter only. 1t will
only be a short time before the de-
mand again becomes insistent, and
the small reserves of finished prod
ucts now on hand will be quickly
absorbed.
q. s. to supply World.
Prior to the war. the petroleum
production from the Russian, Cali
clan. and Rumsnian fields was an
important factor in Central Europe.
These fields at present, are of local
Importance only: and Russia, so far
as the general markets are con-
cerned, can be considered as non
existent. This means that other
petroleum producing countries. and
particularly the United States, must
take care ofIthe entire worlds de-
mands. 1t, therefore, seems to me
self evident that for a considerable
time to come, the American petroleum
industry, while perhaps having oc-
casional periods of slackness, will
on the whole, be called upon to sup
ply a demand that will be equal to
its capacity to meet.
ut will be an unfortunate situa-
tion IL the industry. because Of any
temporary slackness, lets up in any
way in its plans for future develop
ment, particularly as. to crude oil
development; for in spite of the ex-
tremely high cost of crude oil pro-
duction, every barrel now put into
storage will in due time be de.
manded. for the industry of the
world cannot function without ade.
quate supplies of petroleum prod,
ucts."