Annual Meeting of the American Institute of Mining, Metallurgical and Petroleum Engineers, 14–18 February, New York City

Recent Trends in Oil

Since May 1, 1957, oil shares have lost their rank of leadership with investors. Until recently, the public had invested more money in oil than in any other industry - but today, oil shares have slipped to third place behind utility and chemical stocks. The current value of oil common stocks approaches$43 billion, approximately the same value they had over years ago in May, 1957.In contrast, utility stocks moved from $33 to $50 billion, and chemical stocks moved from $30 to $46 billion over the same period. Over the past 2 1/2 years, oils were one of the major groups showing a decline in their market price, dropping from 20 per cent of the total value Of all common stocks on the New York Stock Exchange to today's figure of approximately 15 per cent of total value.

An investor should not be too alarmed at these statistics because the oil industry has undergone a period of tremendous expansion during its first 100years, an expansion accelerated particularly by the invention of the automobile in the early part of the century. Much of the gain in petroleum demand can be credited to displacement of other fuels. The exact extent of this displacement is not known, but in 1920 oil and gas accounted for slightly less than 18 percent of the total energies used in this country. By 1943 this rate had climbed to 40 per cent, and in 1956 it had reached 67 per cent. Today, oil and natural gas supply 72 per cent of the energy used in the United States.

A consensus of various petroleum economists indicates that oil and natural gas will supply 75 per cent of the energy used in the United States by the year 1967 and that the growth in demand in the U. S. will approximate 4 to 5 percent/year over the next decade. It is estimated that demand will approach 14million B/D by 1967 compared with approximately 9.5 million B/D today; it is further estimated that the Free World oil consumption will increase at an average rate of approximately 7 to 8 per cent/year, nearing 30 million 3/1) in 1967 compared with approximately 17 million B/D today.

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