THE PETROLEUM TRADE.

Press, Volume XII, Issue 1581, 30 November 1867, Page 2

THE PETROLEUM TRADE.

[From the " Pittsburg Commercial."] Three to four years ago the country was wild with oil excitement. In all regions of Western Pennsylvania, Virginia, and Eastern Ohio prospecting and boring of oil wells were going on. Large tracts of oil territory were thus discovered and brought to yield, but at what expense? On an average, only one well out of twenty became a pumping well; and of the numberless joint-stock companies started for oil operations but very few succeeded, and are still in existence. Yet the enormous yield of 1866 was mainly due to tHe large sums spent by those companies, and the great efforts they made to discover oil. At times during the year 1866 the production of Western Pennsylvania alone, amounted to not less than 15,000 barrels of crude oil per day, and that of the United States to not less than 18,000 barrels. Bat the general nature of an oil well seems to be that it exhausts itself, and tha average life of wells is generally estimated at one year, if it is as much as tljat. And just as a single well exhausts itself, so an entire district. A visitor passing through the oil territory will see more ruins of flowing and pumping wells than actual wells; he will pass through entire villages of abandoned derricks and tanks, where once thousands of barrels were pro* duced a day, and where now not an engine, not a living soul, not ono■■;•. working well is to be seen, but only the ruins of past greatness. The total production of the oil regions of 15,000 barrels per day during September, 186b", has been gradually declining till now, and is at the present time not over 8000 barrels, which is equal to a regular decline since that time of 700 barrels per month, or 160 barrels per week. No new territory is developed. The general bad success of joint companies has frightened away capitalists, and the wells now: boring are not in new ground, but in known territory and in the mid*-t of other wells already working. They only serve to exhaust the territory so much the quicker. A territory will yield altogether the same amount of oil with ten wells as with twenty, only twenty wells will pump it out in half the time; the decline will only be the more rapid. From, these discouraging facts in regard to the supply let us. look at the consumption. Oil is of too recent an introduction to have come to a regular yearly * consumption. Every year witnesses an increase over the preceding year, and the low prices of the late times have made it a favourite light here us well as in other countries. Two years ago the consumption of this country was in the neighbourhood of 850,000 barrels. In eonaequence of a larger Southern and Western demand, the consumption baa increased, and may be put down for this year at over 1,000,000 barrels. In Europe our petroleum has to compete with rapeseed oil, which, in France, Germany, Belgium, and Holland is the only oil used for burning purposes, and is used for nothiug else. In .England whale oil was usaa

f late years alongside of rapeseed oil. SLeseed oil is more'than double the ■L 'ofout refined-petroietiffi, and it P rl therefore, not astonishing ' that 1 -purDpeana have become largely our jlnstomers for refined petroleum. From about 800,000 barrels two years ag » the consumption in Europe ran last 1 tear to about 1,150,000 barrels. This 'ir to iudge from present indications, [he of consumption in Europe w iH be about one-third over - flßfc year's- consumption. But to the regular increase of one-third over last year's consumption will probably be f J,jded this year an extraordinary in- ' crease, resulting partly from the stopim_e of the Bhale oil refineries in Jgno-land, and partly from the failure of this year's rapeseed crop in France >*• d Germany. The shale oil refineries of England are said to have turned out last year not less than 500,000 'barrels refined, but were obliged to etop ia consequence of the low price of netroleum. Many of them are broken xm and others,if an advance should take place, will not be ready in time. Thesetwo cause's will stimulate the demand for our petroleum, and this year's congan _ption will probably not be less than 1,600,000 barrels or 1,700,000 .barrels. The total consumption at home and abroad will therefore be 2 700,000 barrels. Against this consumption we had on January 1, 1867, c _ stock of about 1,200,000 barrels all reduced to refined, here and abroad ; add to this this year's production and •ye have the amount of oil that may be relied on for this year. Allowing for the declining quantity 2,550,000 barrels crude, equal to 1,800,000 barrels refined, would be the total production for 1867. This production, with the stocks on January 1, 1867, would give us 3,000,000. If we deduct tbe probable consumption from these 3,000,000 barrels, only a stock of 300,000 barrels refined oil will remain on hand here and abroad, and by March apd April next even this stock will be used up entirely. In 1866 the production outstripped the consumption by 6,000 to 7,000 barrels crude every day. In 1867 the consumption outstrips the production by at least .7,000 barrels a-day. In 1866 prices could not help but decline ; in 1867 prices cannot help but advance.