Petroleum Optimism

Petroleum producers and refiners are beginning to recover somewhat from their blue funk of recent months, and to foresee the day, not far distant, when the heavy stocks of crude oil now accumulated through overproduction can be materially decreased. Oil shares on the New York Stock Exchange have experienced a general recovery, and the price of crude petroleum in several fields is likewise showing a rising tendency.

Consumption of petroleum is slowly but unfailingly on the increase; it is therefore mainly a question of how soon the huge output of oil can be curtailed. On this phase of the question, the expert Joseph E. Pogue recently made several remarks.

Mr. Pogue points out that the ultimate estimated supply of recoverable oil in this country is 11 billion barrels, of which 6 billion barrels have already been extracted. Moreover, the great oil shortage during the war not only induced capital to flow into the petroleum industry, but also greatly improved the efficiency with which engineers and producers discovered and extracted oik The rate of crude oil production has thus been doubled without a substantial increase in drilling operations. These factors naturally led at first to overproduction, low oil prices and depression. But even though this is only temporary, the physical limitation of our ultimate oil supplies will be bound in the long run to curtail surplus production.