The New York herald., 1921-01-03
PETROLEUM. TRADE
HAS BANNER YEAR
Smashes All Records for Activ-
ity and Progress During
Last Twelve Months.
PRICES HiT HIGH LEVELS
Industry Creates Largest Vol
ume OF Business ss-0utlook
for 1921 Excellent.
Nv j. W. sMALLwoOD.

Nineteen twenty was the petroleum
iadustry's banner year All records for
activity and progress were broken and
the Industry enjoyed the largest volume
or business in its history, with prices at
their highest levels Predictions re-
garding consumption of oil were ex-
ceeded and the principal consideration
was 10 increase supply and extend IA
cil.ties sufficiently 70 provide for un-
piecedent.d demand.
The American petroleum .ndustS's
reau.rements during the year amounted
10 100000 O0o barrels OF crude OIL worth
: probably near s1.500.000,0o0 against
430, ,oO0, 600 barrels of about SSoOooo,o ooo
value IN 1919. Production Of crude oil
IN the United States IN 1920 was about
$4,000, 900 barrels Of more than ST.
300, 00o, 900 estimated value in contrast
; to a production of 377.7o0,0Oo barrels
; valued at $3.50. 100000 in 1919. Some
idea OF the industry's recent progress
can be obtained by considering that pro-
duction IN 1914 was 265,00o.o00 barrels,
!. valued at S214, 100000 and In 1911 220.-
: 600, 900 barrels having a valuation of
sf34.000. 900. To supply excess OF demand
over domestic production we imnorted
/, from Mexico In 1920 more than 100000
d 600 barrels. an increase of 100 per cent.
= compared with similar imports in 19ls-
Against this showing our exports of
4 mineral oil were about T0.000.o00 Barrels
Naturally with record husi.lces At IA
vorabe prizes earnings of Leading OIL
= -companies esta olislledFa q rev hgn dur-
2 ing the year. Most big companies issue
only annual financial statements, but
Ja r,ui,lip EhOW sub
stantial increases in earnings compared
(, with those of previous years.
whole Industry Active.
4 Every phase OF the industry expert
enced great activity IN the lest twelve
months. All records for operations were
= I rolSeu About $4,000 wells were COM
..rleted against 2s.462 in 1919 and "a
se4S in 1918. Tt is estimated that the
ave-~ra cost for a completed well Is
$4,000 which would bring the total
cost OF drilling In the past year to more
than sT00.000.0 Refinery construc-
x ton was extended greatly to care for in
7. creasing production and provide for ex-
rand.ng markets. At the end of October
532 refineries having almost 1,10O,0Oo
barrels daily capacity. an increase of
forty-two refineries and 100000 barrels
daily capacity compared with the 19l
. showing. were in operation. Probably
contrary to the general impression. ex-
ports Of oil In 1920 established new
high SURPRISING even record shipments
during the war The volume Of oil ex-
ports for 1890 exceeded $500 .0O0,H0.
100 per cent. increase compared with
that OF 1917.
Leading oil interests are unanimous
Z N opinion that the volume of business In
..t..1 tn apd that fNA only
{. limit TO consumption WIFI be production
"a careful analysis indicates that al
though there may be some recession "A
prices at this time. due 10 seasonal ex-
cess OF production over consumption and
general tendency toward lower prices,
amy radical reduction seems unlikely
because OF necessity OF maintaining sub
3 stantlal production. A gradual lower
Ing of prices for both crude and refined
products would be a desirable thing II
II could be accomplished with lower costs
OF labor and materials and without seri-
cusly disturbing supply. but any radical
, drop similar 70 recessions In many other
? industries almost certainly would he
followed by situation which would
cause higher prices because the business
lives largely on constant efforts TO sup
My new production TO take the place of
. declining output of older wells.
d. New Wells Produce 20 Per Cent.
~ 1t is estimated that % per cent Of
existing production in the United States
SIS from new wells. which means, at
present rate OF output. 100000 900 bar
res q year from new wells. Contrary
Ito popular impression, the industry's
principal supply is from thousands of
very small producers. the latest stalls
ties showing that 258.00o wells in tho
y srn'ted States produce daily an average
ls,of less than five barrels.
~ The oil trade recently has been feel
Y ing the Industrial depression. and IL tha.