Petroleum Economics - The Market Price of Oil Securities (With Discussion)

Until four years ago the market price of oil securities moved directly and immediately with the general list. This point, was first developed by the senior author in 1924 while making a statistical study of the relative movement of oil securities and the general market. Plotting the monthly averages of 17 oils against 233 industrials disclosed the sur- prising relationship shown in Fig. 1. The traditional vagaries of the oil business, the wide fluctuations in current supply and resulting abrupt changes in crude prices nevertheless produced no movements in the market price of oil securities as a group, which departed notably from the movements of the general market. Obviously general business conditions did not always change when and as conditions in the oil industry changed; clearly the fluctuations of