The economics of petroleum . e conditionsunder which oil-refiningmay be profitably con-ducted. The trends shown inFig. 44 will not maintainthemselves through theprice depression of 1921,but revealing the habitof oil prices on a risingmarket they may be ex-pected to reassert them-selves when oil pricesnext begin to advanceunder pressure from thecrude petroleum situa- ^°^ , Fig. 45.—Trend of the i)rice levels of crude Two Types of Prices. petroleum and its i^rincipal products in the—The prices of lubricat- United Statrs by years, 1913-1920, in percent-ing oils and fuel oil are ages of the averag
The economics of petroleum . e conditionsunder which oil-refiningmay be profitably con-ducted. The trends shown inFig. 44 will not maintainthemselves through theprice depression of 1921,but revealing the habitof oil prices on a risingmarket they may be ex-pected to reassert them-selves when oil pricesnext begin to advanceunder pressure from thecrude petroleum situa- ^°^ , Fig. 45.—Trend of the i)rice levels of crude Two Types of Prices. petroleum and its i^rincipal products in the—The prices of lubricat- United Statrs by years, 1913-1920, in percent-ing oils and fuel oil are ages of the average prices in in a highly competitive market by the normal operation of supply and demand,whereas the prices of gasoline and kerosene are to a dominantdegree decided by the tank-wagon price set for these productsby large marketing companies. This fundamental distinction be-tween the two groups of prices should be held clearly in mind asit is an important key to the course of prices in the future. In short,. 1913 1914 1915 1916 1917 1918 1919 106 THE OUTLOOK FOR OIL REFINING the one set of prices is quite sensitive to the vagaries of themarket, while the other set of prices is open to additional influences with a stabilizing re-sult. Fig. 45 illustratesthe extent to which theprices of crude petro-leum and its principalproducts increased be-tween the pre-war yearof 1913 and will be observedfrom this chart thatthe prices of lubricat-ing oils and fuel oil,together with crudepetroleum, rose tohigher levels thanthe prices of keroseneand gasoline, the lastnamed having ad-vanced the least of relationship issignificant and sug-gestive of the funda-mental difference ex-isting between thetwo sets of purposes ofcomparison, the pricelevel of commoditiesin general is alsoentered upon Fig. 45,and it may be ob-FiG. 46.—Trend of the output of crude petroleum and ggj-ved that this in-its principal products in the United States, 1914- , ,. -f , 192
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