Future Markets.—In 1921 the United States is facing an actual scarcity of petroleum for the future. During the coal strike in the early winter of 1919-1920 there was an increase in the use of oil for fuel in place of coal. Some of the rail roads of the Northwest and the towns and cities now using oil for fuel are facing a return to coal, for the present at least. Conservative marketers are planning to curtail their trade and supply a limited number of customers. California operators in the winter of 1919-1920 purchased 50,000,000 gal. of gasoline in the Mid-Continent oil field and sold it in California practically at cost. California during the summer and the winter of 1920 purchased oil from the Mid-Continent.
Table 1 shows the increase in the use of motor vehicles and the increase in the production of oil for the past 10 years. It will be noted that the increase in motor vehicles for 1920 was * The importation of Mexican oil is also an important factor in lowering prices temporarily.
Average increase 33 per cent. Average 7.1 per cent Increase 1919 over 1911 in cars 979 per cent Increase 1919 over 1911 in production 71 per cent 19 per cent and for 1919, 27 per cent. This lower rate of in crease is directly due to the general business depression starting in 1920. Oil production, however, increased 17 per cent in
1920 as against 7 per cent for 1919.
This is an abnormal condition. Once the business depres sion is over, increased consumption is bound to result. How high it will go depends entirely upon the available supply of oil. The number of wells drilled in 1919 was 29,072. In 1920 the number was 33,675, an increase of 4,603 or 15.8 per cent. The increase in production was 17 per cent, slightly greater than the percentage increase in new wells.
The estimate for new automobiles is given in Table II. How ever, oil consumption may he checked due to the fact that oil production cannot maintain its present rate of increase very long. The oil producing areas are limited. That of the United States is 4500 square miles, with a potential reserve of 8,000,000,000* bbl. The amount of new oil land is unknown, but appears to be of small extent.
Oil consumption will amount to at least 700,000,000 bbl. in 1925 figuring on a 7 per cent annual increase and that United States consumption in 1920 was 443,400,000 bbl. This includes the export trade which was 88,000,000 bbl. in 1920.