The herald., 1897-11-12
Oil Producers Can't Supply
the Demand
LARGE CONTRACTS WANTED
THE SPRECKELS WOULD TAKE
10000 GALLONS
The SLOGAN Oil Company Is Negotiat'
ing the Sale Of 65, 900 Gallons.
News Of the Field

The report that the various railway
to abandon the use of oil and substitute
coal in their locomotives. should they
be compelled to pay one dollar per par
rel, has created no end Of COM
ment among the local oil producers, who
openly declare that they don't have to
depend upon the railway companies TO
take their product, as they are not by
long odds the only large consumers, as
has been claimed. The producers fur
ther claim that the demand from out
side sources is now far greater than the
supply, and prospects are that this con-
dition will continue for some time. Sec
retary and General Manager Edward
Strasburg of the Oil Producers trus-
tees said yesterday: "It is foolish for
any one to think for a moment that the
railroad companies contemplate chang"
ing their engines again from oil to
coal burners should they be compelled
to pay one dollar per barrel for oil.
don't know whether or not they are try
ing to bluff some one, but can tell you
those officials are too shrewd to make
such a change just because of an in
crease of 90 cents per barrel. They have
figured often, and know well that oil at
$1.25 per barrel is cheaper for them than
coal. We don't want to put the price of
oil over cne dollar, in fact, we are well
satisfied with that figure, but after jan
uary 1st no consumer can purchase any
for less money, for we will control by
that time almost the entire output here.
A READY MARKET
1--WE could find a ready market
in San Francisco for $4,000 bar
rels monthly if we could enter
into a contract to furnish that amount
for period of one year. but that we are
unable to do, as the present supply will
not warrant us. At present there is
shortage Of $4,000 barrels, and as the
monthly production is only about 100000,
we have to be careful in making outside
contracts. We have just closed a con-
tract to. supply the Los Alamitos and
Chino sugar factories with $4,000 and
100, 900 barrels respectively, and are
building tanks to store it in for them
until called for. A few days ago we re-
ceived q communication from Spreckels
Bros. of San Francisco, asking if we
12O, 900 barrels, to be used at their sugar
refineries. During the past month we
! sent $4,000 barrels to consumers at Red
lands, Cotton, Chino and San Diego,
while $4,000 barrels were shipped to San
Francisco and other northern points.
With these prima facie facts, besides the
$4,000 barrels used each month by the
various railway companies, and the 3d.
I, =, R,.,,, !,
in Los Angeles, does it look much as
though the market would be stagnated
by an overproduction?
"Even If the railroads did not use Oil
as fuel the local Oil producers could sell
their product without the least trouble.
The demand for petroleum is continually
increasing as new enterprises are daily
starting all over the state. and whenever
fuel is needed they invariably want oil
in preference to anything else. When
oil is sold less than one dollar nothing
is made, as it costs almost that to pro-
duce it. There are some wells here IN
Los Angeles that produce oil at a cost of
50 per barrel, and the owners continue to
operate them."
NEGOTIATING A LARGE DEAL
j. A. Graves, president of the SLOGAN
Oil company, in speaking of the pro-
posed increased price of crude petrol
cum, said yesterday: "Our company is
not worrying over the report that the
railroads would not buy oil here when
the price is raised to a dollar. They
consume a large quantity of the local
output, it is true, but am sure the pro-
ducers will find plenty Of purchasers
elsewhere. If the oil companies here
could be sure of q supply any number
of large contracts would be made for
them with San Francisco parties. but
one never knows how long his well will
keep pumping. Usually new well pro-
duces more oil during the first ninety
days than it does during the following
nine months and as there is never an
assurance of any certain amount, pro-
ducers are careful about making con-
tracts, as they may not be able to live
up to them. The SLOGAN company has
produced since March 1st, 10000 bar
rels Of oil and the wells are holding out
remarkably well. We find a ready mar
ket for it and we could sell more If we
had it. At present we are negotiating
for the sale of $4,000 barrels to a San
Francisco firm at $1.35 delivered there.
More manufacturers in the latter city
would use oil from the local field If
they could be assured of permanent
supply. The price should be no less
than one dollar, for any figure less is un-
profitable to the producer