THE OIL OUTLOOK
FoR a full exposition of the important statistical truth that the secular trend on the oil industry is upward investors cannot do better than study Lord Cadman's review at the annual meeting of the Anglo-Iranian Company. Oil con- suming machines are increasing in number all over the world and the pace is so rapid that the effect of even a fair- sized general setback in trade has been merely to slow down the advance. This is not, of course,, quite the same thing as saying that oil profits must go up and up and up. Profits depend not merely on sales but on costs and prices.. Thus, on -the day after Lord Cadman painted us such a bright picture at the Anglo-Iranian meeting we have Lord Bearsted reminding shareholders of Shell Transport and Trading that selling prices last year fell away in the final quarter. As a consequence, " the general level of profit in 1937 must be regarded as a disappointthent, especially in view of the fact that the demand for crude oil and producti—dOmestic and export—continued to increase and was 9.8 per cent. higher in 1937 than in 1936." Lord Bearsted obviously pitches his earnings expectations very high and fraialdY, as a. shareholder, I should be welt satisfied with the position and the prospect. The 'Shell- group, it seems, is losing no time in pushing forward with expansion schemes in Venezuela which, in relation to the Mexican situation, is both good business and good tactics. Given reasonably favourable developments in the United States the " Shell " company can be relied on to tura out the goods—and make satisfactory profits. I am impressed, too, ' by the Anglo-Iranian outlook. Excellent results have been obtained on the Gach Saran field and there has been a promising discovery at White Oil Springs. If these developments on the production side work out well they will offset any moderate contraction in the marketing earnings. There is not much to choose between the yields on " Shell 7 ordinary at La and Anglo-Iranian at £41. Both giVe over 5f per cent. and both are good investments to hold.
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