Difficulties in the Petroleum Situation A MATTER of vital concern
Page 48
If you've noticed an error in this article please click here to report it so we can fix it.
to the _LA_ road-transport business is the present position of the oil industry in the various markets of the world. Prices of " crudes " are claimed to be below cost of production and the time is ripe for far-reaching efforts at stabilization.
For this reason, therefore, interest attaches to the visit of Mr. Earl W. Mayo, editor of the New York paper, World Petroleum, and Mr. T. Orchard Lisle, executive editor of the same journal, who are now in England and expect to remain about a month, the object of their visit being to make a survey of conditions and to exchange views with business men on this side. For the time being they can be communicated with at the offices of Mr. E. M. Wright, 20, Buckingham Street, London, W.C.2.
1334 The general attitude of these two men appears to be that attempts at stabilization in any industry are fraught with difficulties, as is witnessed by the breakdown of the American oil exporters' arrangement some 18 months ago, but that any measure of good which may result from co-ordination is undoubtedly well worth while.
Whilst users of petroleum products, like those who have goods to be carried, want the lowest rates obtainable, it will be plain that a complete collapse of the price structure must eventually prove detrimental to all. It is better for the purchaser to allow the supplier to make a modest profit.
It is explained that agreements for output control are extant in the three main oilfields of America (California, Oklahoma and Texas) and exports could be husbanded as they have been in the past. Nevertheless, the laws prohibiting anything in the nature of a conspiracy in restraint of trade hamper, in some , degree, comprehensive plans which could in other circumstances only be regarded as rational.
The main weakness, however, seems to lie outside the United States, for even with a measure of control in the largest oil-producing country, world prices may easily be upset by low-priced shipments from other countries such as Russia, Venezuela, Rumania, Persia or Burma.
A conference of important interests in oil-exporting countries is thought to be necessary, the object being to arrive at some basis of agreement, however rudimentary, and it is believed that Russia will not be averse to entering the discussion.