The economics of petroleum . 1913 1914 1915 1916 1917 1918 1919 1920 1921 Fig. 118.—Relative prices of crude petroleum, petroleum products, and allcommodities by months, 1913-1921, in percentages of the average figuresfor 1913. (Average prices in 1913 = 100.) remained stable, showing few of the fluctuations elsewhere takingplace. The beginning of 1918, however, saw an abrupt ascent toprices well above those of 1916-1917, with further advances in early1918 to twice the pre-war level, to be explained by a combination ofcircumstances—increases in the cost of high-grade crude, generaldomestic cond
The economics of petroleum . 1913 1914 1915 1916 1917 1918 1919 1920 1921 Fig. 118.—Relative prices of crude petroleum, petroleum products, and allcommodities by months, 1913-1921, in percentages of the average figuresfor 1913. (Average prices in 1913 = 100.) remained stable, showing few of the fluctuations elsewhere takingplace. The beginning of 1918, however, saw an abrupt ascent toprices well above those of 1916-1917, with further advances in early1918 to twice the pre-war level, to be explained by a combination ofcircumstances—increases in the cost of high-grade crude, generaldomestic conditions of stress and high costs, transportation con-gestion, shortages in special grades, and the ever-increasing growthof demand. From then on to late 1919 there was little change inlevel. 250 PRICES OF PETROLEUM AND ITS PRODUCTS. VALUE RELATIONSHIPS OF THE PETROLEUM INDUSTRY 251 MILLIONSOF DOLLARS1600 In early 1920, In sympathy with markets in general, the price oflubricants rose to unprecedented heights, surmounting the wholeprice structure of petroleum. But this increase was short-lived;lubricants proved to be closelysympathetic in price withcommodities in general andfollowed the countrys price-level downward during itsentire descent to early 1921,thus anticipating by severalmonths the fall in price ofcrude petroleum. This im-mediate reaction to the in-dustrial depression is readilyunderstandable in view ofthe far-reaching emplojmientof lubricants in industry. Relation of Oil Prices toCommodity Prices.—In orderto bring the trend of pricesin the petroleum industryinto a still more summarizedview, the relative prices for(a) crude petroleum, and (b)petroleum products (weightedaverage of gasoline, kerosene,fuel oil, and lubricants), areplotted in Fig. 118 againstthe price-level of all commo-dities as determine
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