New Britain herald., 1923-11-23
BABSON BELIEVES OIL INDUSTRY
 WILL IMPROVE DURING NEXT YEAR

ernor McMasters of South Dakota ] forced d reduction from 20 to Is cents
 gallon in that state. This drastic cut started a wave of price cutting, i gas wars, and further crude oil price i reductions which have probably not 1 yet quite reached the bottom. I These reductions in crude oil and | gasoline prices have cut deeply into the earnings of oil companies. 1nde- Dendcnts' and Standards alike. There
 has been, and will be. further house cleaning and revampinE along many lines in the strong as well as the weak companies. Policies of long standing
 will be changed. regrouping Of Inde- pendent companies and unlocked for
 reworkings of Standard connections may well be expected. Many a small
 producer and refiner will be forced
 out of business.
 The crisis. however. is over and
 production is now on the decline. The industry as a whole is gradually right ing itself and the spring and summer of 1924 with increasing consumption and lessened production should bring into view a more optimistic horizon than exists today in the oil industry.
 Meanwhile, fifteen of the better grade oil stocks have declined s1.000.- coo, GOO in value from their high points for the year in March and April. or an average decline Of about 30 per cent. A diagnosis of the trou- hle reveals two primary causes-the general hearish trend ot the stock market, and overproduction of crude oil,
 No one group of stocks can long withstand a bear market to say noth- ing of warding off blows such as those overproduction has given tho oil group. During the last ten months the world has witnessed the greatest period of oyerprodmction the oil in- dustry has ever, or probably will ever sustain. Although the consumption of all petroleum products. gasoline in particular, has greatly increased, at the beginning Of the storage season. the enormous amount of ,000 o0n. .noo gallons Of gasoline were on hand.
 The Mid-Continont pipe line indus. try has been hard hit duo to ovcrpro- ductton in California. lnstead Of the usual supply of crude oil being taken from this field the Atlantic seaboard has been receiving large quantities by tank steamers from California. Pipe line runs have thereby been reduced. | causing a decline in earnings as re- nected by the recent passing Of tho Crescent Pipe Line dividend
 Persistent rumors Of new financing i have forced tho stocks Of a number Of | companies, notably the Texas Con- | rany. to low levels. Tho chief cause | for financing is the necessity Of carry | ing large inventories, brought on, Of | course. by overproduetion. But tho country needs large visible stocks on | hand in order to assure against short age for the ever increasing demand, this fact. new financing for such purposes should not be re- garded in an unfarorablc light.
 Tt is not expected that oils will take noticeable spnrt upward prev. lops 10 the general market rise. But in the meantime, the better grade stocks should hold their own. and as ovcrproduetion becomes less and less a factor, by the time the general hcarish attitude has lifted these Se- lurities should be in a position 10 par ticipate in the next broad rise. -I
 General business as shown on the is running at IS per cent below normal--an improvement Of | per cent over last week"