The herald., 1894-12-25
The Market Glutted With the
Product.
Sales Made From so Cents to S1.50
Per Barrel.
Gossip About the Local Oil Industry.
substitution of Gil for Coal on
Locomotives,


Union Oil company has decided to make the
pri ,e after the LIST of January soc per barrel on
board the cars at santa Paula. This would make
the price about 79c in Los Angeles. The local
ma nager of the Union Oil com pany would not
adm it that such is the intention of the com
pany, but intimated that big cut might
be n ade for while in order to convince
local producers that 1t is useless for them to
compete with the big corporation.
FIFIY-CENT OIL.
1t is alleged that some OF the local producers
are now selling oil at soc, and glad to get that,
but none OF them will admit that they are sell
ing for that price. They are all very reticent az
10 what they are receiving. Some claim that
they are not taking less than ST so, but this un-
douDtedly is exceptional. The men holding out
for 80 are apparently not selling much oil
Those who got 81. % are in luck, and il IS prod
able that the majority are not receiving much
above 81.
That is about as close as the searcher for ell
news could figure the market. 1T is perhaps
safest to say that the market ranges from soc
10 81 30 per barrel, according 10 quality. quail
ity unquestionably has much TO do with the
price, there is a marked difference between
the various grades of oil produced, some having
specific gravity as low as 9, while the Union
oil people maintain that Oil of less than "a spe-
cihc gravity Is unit Tor use. This the local
producers deny. Seventeen and one-halt per
cen, they claim, is a fair estimate OF the spe-
citc gravity OF their oil, and they point to The
fact tnat 1t is extensively used throughout the
city for fuel with uniformly good success.
THE CHIEF DRAWBACK
Up to the present time the outside oil compa-
MES OF long standing have pooh poohed the
local oil industry Doth as to the quality of the
product and the permanence of the supply.
They claim the local deposit is but seepage
from larger and purer body; that it is thick
and muddy, and will soon be exhausted. The
loca producers, on the other hand, claim that
experts have pronounced the geological forma-
1on al right. that chemical analysis shows
the oil to ee of good quality, aud that there 1s
n ha "a lf az n H. ma a n
supply In other words, it is not the lack of an
abundance of good oil that is bothering them,
bu. the want Of facilities for handing the pro-
duct and sy tematic marketing. With the pres
ent cramped storage capacity. producers are
compelled to take any price offered for their
product as fast as it is pumped out, or else close
their wells until they can dispose of the oil at
better prices. number of wells are idle at the
present time, they cain for this very reason.
Another imped ment to the marketing of the
product is the lack OF confidence of consumers
in the nermanence of the supply. There are
Sill maay who believe that the Second street
oil field is a mere pocket, and that all the oil
there will soon be pumped out This opinion
is stoutiy combatted by the producers, as here
tofore stated. Certain it is that number OF
large manufacturing plants that would use
crude oil fuel hesitate to change their tur-
ma es for fear that they will not be able TO Sc
cure permanent supply OF petroleum.
THE PROPOSED REMEDY.
In order to dispel all fears of this kind. the
Second street oil men have hit on plan which
they think will remove oil doubts and demon
strate their ability to supply oil for fuel for
every steam-power plant in the city, With this
end in view the operators in the Second street
PARK district havs recently formed the Pro-
ducers Oil company, of which every we'll
owner in the district is said TO be n member
All the oil produced in the teld Will after
January 1st, it is alleged, be sold through this
One of the first objects of the Producers Oil
company Will be the erection of 10000
barrel tank at some safe point on the river i'll
or aar the manufacturing district, and where
it could do no harm in case OF fire. A pipe line
Will convey the oil from the wells direct to the
storage tank, from which it will be distrib-
uted to consumers. 1t is expected to have this
reservoir competed within 60 or 80 days AS
be from 1o00 to 1900 barrels per day and in
creasing, 1t will not take long to fill the stor-
age tank. Then the producers will be in q
position to talk business to consumers.
THE PRODUCERS COMPANY.
The Producers Oil company had its origin in
the association which was formed some time
ago to fight the suit brought by certain prop
erty holders of the oil district 10 enjoin the oil
industry on the ground that 1t is nuisance.
There are 81 mem hers of this associstion-cor.
porations and indi viduals-and it is claimed all
are will be members of the Producers COM
pany, which has not yet been Incorporated, but
probably viii before the close of the week. The
Injunction suit has not yet come to trial, but
the oil men profess the utmost confidence in
the outcome. as they claim the property inter
ests they represent are so much greater than
justice, give them the greater protection.
1t is claimed prices will become settled as
the entire local product. Certificates will be
given to individual producers for the oil they
turn into the common reservoir, and these GER
tifcates can be converted into cash whether
the oil is sold Immediately or not. The oil can
be held till the market is favorable. Btill the
object is not to form a trust to keep up prices
The engineers of the scheme say that would be
i'm possible, as competition with outside COM
panies would prevent it, The local combine
simply aims to take care of the entire local
product and make the price uniform for the
entire output instead OF each individual pro-
ducer selling haphazard and keeping the mar
ket demorslized.
urge the objection that the scheme is imprac-
ticable, as two many different grades of oil are
being produced to warrant dumping 1t into a
common reservoir. This objection, of course,
is met by the statement that only oil OF GER
tain standard test will be accepted by the com
pany. 1t must all be tested and graded before
being turned into the reservoir. They claim
tn will be an abundance of good Oil to sup
ply the local demand when they once get fully
in operation. The demand, it is contended,
will be vastly increased when it Is amply dem
oEstrated that the supply is unfailing. In fact,
1t is claimed there will be q good market for all
the oil product by all the oil wells in Southern
the conditions have properly adjusted them
selves.
PIPE LINE NEEDED.
pipe line is badly needed to make the
the whole product has to be moved from the
hill section with tank wagons, which is slow
and expensive work. During the recent wet
weather West Second street was practically i'm
pessable, and some of the wells had to close
down because the storage tanks were full and
the wagon service was stopped. For three days
last week the streets were too soft for the heavy
tank wagons. If wet weather should set in
again and last for q week or two, as it is apt to
do during the rainy season, some OF the crude
oil consumers would be greatly inconven-
fenced, as few OF them have storage capacity
for any considerable quantity of oil, ana they
would run out of fuel II the stree Is remained
impossible for any unusual length OF time
Hence the necessity for the speedy construct
ion of pipe line is emphasized,
THE SECOND STREET OIL FIELD
The Second street park oil fields is about Is
months old; that is, it is about year and a
half since oil was first discovered there. The
pioneer developer is Mr.. e. L. D0heny, presi-
dent of the Doh eny Oil company, who sunk an
experiment well on property he owned adjoin-
ing Second street park. The success of his en-
terprise induced adjoining property owners to
try similar experiments, each one rewarded
with success, until at the present time there
're 155 completed wells in the district, and
not dry hole among them. Besides these
struction.
These wells are producing all the way from
to 100 barrels of oil per day, the total daily
output being about 100 barrels This makes
the general average only about barrels per
well per day, but IL must be remembered thata
great number of the wells are not being
pumped at present, for reasons already stated.