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The noteworthy features of the year 1886 have been, first, a marked increase in production ; second, a steady decline in all the old reliable districts, including “ Bradford ” and others; third, a large decrease in field operations ; fourth, a material increase in consumption at home as well as abroad, and consequently a very much larger export of crude as well as refined oil than has ever been recorded in the previous history of the trade; fifth, a large falling off in the volume of speculation in pipe line certificates upon the floor of the New-York Exchange ; sixth, the lowest average price for the year for crude certificates that has been yet recorded. These features are treated in detail under their separate headings.

Production.-Although there has been a continued rapid decline in the production of the old wells, particularly those of the Bradford district, which had come to be considered as the “old reliable," the opening of four new pools during the year has resulted in the total production showing a very considerable increase. The new sources of supply comprise, first, the pool struck in Cogley Run during the latter part of last year, and which reached its maximum of 4,500 bbls. in January, 1886; then followed those in Tarkill and Washington, with a maximum of 4,500 and 18,000 bbls. in September ; and, lastly, came those of Kane, Shoustown and Shaunopin, the last two being practically one, with a maximum of 6,200 and 5,500 bbls. in October. The steady and remarkable decrease that took place in production up to the commencement of 1886 is best appreciated by comparing the average daily runs for the past four years. Beginning with 1882, the average daily runs for that year was 87,094 bbls.; but in 1883 the average was only 66,811 bbls. ; in 1884, 64,472 bbls., and in 1885, 58,156 bbls. ; a falling off within that period of nearly 30,000 bbls. With the opening of the new pools above mentioned, the runs during the early portion of 1886 commenced to slowly increase, until in September an average of 80,000 barrels per day was reached, but that appears to have been the maximum, and since then a steady decrease has taken place, November showing an average of only 72,000 bbls., and December 65,000 bbls., so that the average for the year, which is 68,358 bbls., while considerably in excess of 1885, is still far below the heavy production of 1882.

The striking of the five new pools was the result of unusual activity in drilling for gas as well as oil over a large stretch of territory that has ever been regarded as likely to yield practical results, and most of which is, of course, now condemned. In addition to this source of supply, the Lima (Ohio) wells have produced about 4,000 bbls. per day, but as the oil from this locality has been of ex

ceptionally poor quality, and worth only about 35 cents per gallon, the yield of the Lima wells is not included in the average daily runs given above. Lima oil is said to partake largely of the quality of Canada oil, coming through the same sandstone, and having even a worse odor than the Canada product. Moreover, it is used almost entirely as fuel, and for this purpose is being rapidly utilized.

The one grave feature connected with the production of American oil is the fact that the old Bradford district, which has been long regarded as the mainstay of the industry in this country, and from the production of which locality stocks were run up to the enormous figures touched August 31st, 1881, when they aggregated 39,083,464 bbls., has very evidently seen its palmiest days, for from an average yield during the month of August, 1881, of 81,000 bbls. per day, it has now fallen to less than 25,000 bbls. per day. Alleghany, which reached its maximum production in July, 1882, with about 24,000 bbls. per day, has come down during the past year to a little over 5,000 bbls. per day. These districts have been heretofore the chief producers, and their rapid decline naturally causes some degree of apprehension, for while their falling off during the past year has been offset by the gush of the new white sand pools already enumerated, the recent rapid falling off in the flow of these new developments shakes faith in their permanent character, and seems to foreshadow a further general decrease in production, so far as the present available sources of supply are concerned.


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Consumption.—Although it is extremely difficult to arrive, with accuracy, at the ratio of increase in the home consumption from year to year, it is nevertheless undeniable that ever since the introduction of this great illuminator there has been a marvellously rapid increase in its consumption at home as well as abroad, its brilliancy and its cheapness, as compared with every other illuminator, insuring a steady, rapid growth in favor. The increase in consumption during the past year has been unchecked, the fields of its usefulness having been extended and expanded, and the ratio of that increase is undoubtedly as marked as in almost any previous year. This is, of course, in large measure the result of the exceptionally low prices which have prevailed during the entire year, but the large increase in consumption does not find its full explanation in this fact. Inasmuch as home consumption is one of the most important factors in the oil trade, it is matter of regret that it is impossible to ascertain its exact proportions, but it is safe to assert that in proportion to our population the consumption of refined oil in the United States is far ahead of


other country, and that its use as an illuminator is steadily on the increase. From data carefully compiled, we think the increase in home consumption during the year 1886, as compared with the previous year, may safely be put at 8 per cent., and it is only fair to add that some put it at a higher figure.

Exports. The total exports of refined, crude and naphtha from all ports during the year 1886 show an increase, compared with the total exports last year, of 24,513,413 gallons, or a little less than 5 per cent. This is a satisfactory showing, not only in view of the much vaunted competition that our product has had to meet from Russian oil, but also in view of the small stocks that are now carried in all the principal distributing centres of Great Britain and Europe. In other words, this gain may be considered as representing increased consumption, for it is well known that stocks are considerably smaller on the other side of the Atlantic than they were a year ago, and that, so far as exporters are concerned, shipments have been made on the basis of current requirements. Low prices have no doubt stimulated consumption to some extent, but, aside from this feature, the use of petroleum as an illuminator' is daily extending, and is now more universally used by the world's population for illuminating purposes than any other product.

Refined.—The exports of refined, as compared with last year, show a material increase in the East Indies, India and Siam, and South America, but the shipments to China and Japan have fallen off. There has also been a large increase in the shipments to Holland, Norway and Sweden, but those to Great Britain, Germany, Denmark and Austria have decreased. In our last annual review we pointed out how the elimination of all speculative trading in Great Britain and the Continent of Europe bad resulted in the reduction of the working stocks carried at the principal ports to the safe limits of consumption, and the same method of conducting business would seem to have obtained during the past year. As a consequence, any material increase in shipments must necessarily reflect an increase in deliveries or consumption, since the total stocks in Europe at the close of the year are found to be considerably less than at the same time in 1885. The extent to which this decrease in stocks has taken place may be gathered from the following figures, which represent the total stocks in London and on the Continent at the close of each of the following years: 1886, 590,436 bbls.; 1885, 771,379 bbls.; 1884, 1,280,416 bbls.; 1883, 1,766,180 bbls.

Crude.There has been a decrease in the total shipments of crude from the Port of New-York during the past year, as compared with 1885, of about 2,800,000 gallons. The following table gives the exports in crude equivalent from all shipping ports in the United States : New York,

...gallons, 499,226,483 Philadelphia,..

182,764,718 Baltimore,

16,740,323 Boston,..

4,246,003 Perth Amboy,

8,109,400 St. Louis, (to Mexico by rail,)..

1,145,213 Grand total,......

..gallons, 712,232,140 Crude Certificates.-Notwithstanding the fact that the recorded transactions at the Exchange during the year do not present nearly



so large an aggregate as during the year 1885, interest in crude petroleum certificates, as a basis for speculation, bas in no measure abated. The exceedingly low range of prices for the year, however, and the accumulating business under the same roof in other representatives of values, have at times tended somewhat to the temporary divergence of attention and capital from this to other and newer branches of business transacted at the Exchange, so that the decrease in the aggregate sales of certificates would seem to follow as a matter of course. The highest price realized during the year was paid January 26th, when 924 cents was reached, and remained the maximum ; then there was a gradual decline, subsequently accelerated by the large production of the White Sand pools, which continued, almost without intermission, until the end of March, when 71 cents was touched. During the first few days of April there was a little reaction, and prices ran up to 76 cents, when the downward course set in again, and the depression continued, with brief interruptions, until August 24th, when 59 cents was quoted, marking the minimum price for the year. From this there was quite a rapid recovery, under the stimulus of a material falling off in the daily runs from the new White Sand pools, which, having reached their maximum during September and October, rapidly declined until December 3d, when the highest quoted price was 815 cents ; but again declining and running the year out at 70% cents, the highest, and 693, the lowest of the closing day, and scoring an average for the year of 713-the lowest yearly average in the history of the trade. The total sales recorded on 'Change comprise 2,275,000,000 bbls., as against 3,612,000,000 bols. in 1885. The operations in the oil fields have been been bulletined on 'Change with a promptness and precision that have been truly marvellous, while, through the agency of the telegraph, the whole world has been made tributary, in all that pertains to this great industry, to the Consolidated and Mining Exchange. And still the year, taken as a whole, has been singularly uneventful ; barring the one brief period of feverishness, embracing parts of November and December, when the “bull” interest gained the ascendancy and ran the price up from 66 cents to 81}, there has been a gradual decline, which has continued latterly in the face of a marked falling off in production, and an almost equally remarkable increase in consumption at home and abroad.

Russian Petroleum. The petroleum industry of Russia, located on the shores of the Caspian Sea, which has been the only competitor of American oil, and the prospective success of which has more than once created a scare on this side of the Atlantic, influenced the fluctuations of the value of crude certificates, and, moreover, has bad at times a marked effect upon the activity of operations in our own oil fields, does not appear to be in a very prosperous condition ; at least such is the purport of an exhaustive communication from Mr. JAMIESON, recently printed in the Pall Mall Gazette, in which he gives a very intelligent view of the present condition of the industry, which indicates that, if not on the border of bankruptcy, its affairs are more or less demoralized. Its importance and its influence upon our own industry have no doubt been much exaggerated. The product of the Russian wells, as is well known, is so vastly inferior to American oil that there is very little probability of its ever superseding it, no matter how much lower its price to consumers.

Nevertheless, the petroleum industry of Baku is an important one, and the extraordinary difficulties that environ its development occasion great anxiety to those who are interested in it. Already over forty refineries have been closed, and the further development of the industry would seem to be dependent almost entirely upon the successful negotiation of the $10,000,000 loan that has been for so long a time upon the market, and with the proceeds of which the proposed pipe line to the Black Sea was to be constructed. The delay in raising the loan necessarily prevents the construction of what seems to be an absolute necessity for the further success of the enterprise ; but, even if the raising of this money was probable, it will require two or three years to complete the work, and therefore it seems as though the success of the scheme and the salvation of the Baku industry, which so largely depends upon it, is, to say the least, improbable. All sorts of expedients have been resorted to to push the sale of Russian oil in competition with the American product ; our brands and marks have been imitated and appropriated as nearly as they could be without rendering the perpetrators of this fraud amenable to legal proceedings. Furthermore, American oil has been mixed with the Russian product, and even empty American barrels have been filled with the inferior article whenever and wherever the opportunity has offered. Mr. JAMIESON cites the following cogent reasons why Russian and American oil cannot compete on even terms : The American crnde product yields 75 per cent. of the finest illuminating oil, while Russian cannot be made to yield more than 29 per cent. of an oil that is admittedly of inferior illuminating quality. Next, American crude yields 12 per cent. of naphtha, which sells for 20 per cent. more than oil, while the naphtha obtained from Russian crude is of no commercial value. Again, American crude yields a considerable per centage of scale, while none of this product is obtained from Russian.

These facts show to what extent the importance of the Russian industry in comparison with our own has been exaggerated ; but another feature is of especial significance in this connection, and that is, that not withstanding the excitement caused by the gushing of the great Russian wells and the curtailment in field operations here in consequence thereof, the shipments of American oil to Europe have steadily increased, while the stocks abroad at principal distributing centres have decreased, thereby affording incontestable evidence that the consumption of American oil abroad has not only not fallen off, but on the other hand has actually increased. In view of the foregoing facts it is reasonably safe to assert that there seems to be very little, if any, likelihood that Russian oil will ever supplant the American product even in European countries.

The British Consul at Baku has compiled some interesting statistics respecting the production and consumption of Russian oil

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