Sistersville daily oil review. [volume] (Sistersville, W. Va.) 1902-1905, 1904-03-18
ARE DECLINING CRUDE
PRICES JUSTIFIED

PRICES JUSTIFIED
The only conditions undei which
decisive reply might be given to
the above question would be those
which would exist If the producers
individually and In association;
were provided with sufficient tank
age and copjunctive piping to store
their production independently,
selling 1t from time to time to the
agencies, Standard or otherwise,
whose requirements would cause
them to compete for the purchase
of II under those conditions. Meth
er to the Standard nor the indepen
dent refining interests own out
right enough production to meet
their wants, and the pipe lines
which supply them are accordingly
dependent for the most OF their
crude upon the general patrons OF
the lines. These patrons beiHg
without independent tankage and
therefore absolutely dependent for
a market for their product upon
the lines to which they deliver 1t,
must sell their oil when the lines
desire them to do 50 or pay storage
charges and confirm to other re-
oulrements, 10 say nothirg OF be-
Ing dubbed more or less with de-
clinirg prices for rot responding
promptly to indirect invitations to
sell. We have not tie least doubt
that If there were enough of the In
dependent kind Of tankage referred
to, the higher grade crude would
be bringing more than 81 per bar.
rel under the present conditions OF
supply and demand, and that other
grades of crude would also be
b inging higher prices.
! Giving the most bearish weight
! TO Texas. Kansas, Indian Territory
and other regions, both at home
and abroad. lave done or may do,
the fact remains that there has con-
tinued a demand for the higher
grade oils far In excess of produc-
ton, causing such drainage upon
the crude supplies above ground
that /, is now seriously doubted by
many practical oil men whether the
available stocks Of mercantile
crude oil of the higher grade are
not nearly wiped out. 1t Is not
denied by the pipe line people
themselves that this continuance OF
demands In excess of the new pro-
duction to meet has reduced the
stocks very low, as their own
monthly statements have been
showing. 1t Is idle to suppose that
cruce Of this character, Though
especially valuable In both the
quantity and quality gifts products
Is SO superior and indispensable
that no other grade of crude can
enter into competition with 1t. The
point is that, notwithstanding the
supplies of other oils and the OPP
portunities. In some instances at
least, of obtaining them much
cheaper, the demand for this oil
has been In excess OF the supply.
What price 1t would command as
such or for mixture with other oils
If enough OF 1t were stored In In
dependent tankage. Suppose that
the requisite amount of such indie
pendent storage existed not only In
the Pennsylvonia fields but In all
other fields as we'll can there be
any reasonable doubt that the pro.
ducers of all fields would profit? Or
is 1t to be doubted that 1t would be
an advantage to them all even If
there were enough Of such indie
pendent storage In the Pennsyl
vania fields alone?
At this writing the price of high
grade crude oil Is Is cents a bar rel
lower than 1t was at Its recent
highest pointer about the cost
per barrel represented In the con.
strucsion of 10000 barrel steel
tank. In the interest of producers
there ought to be more of that kind
of tanks distributed through all the
oil fields of the country with the
necessary gathering lines to feed
them. One and one.half per cent
of the vslxe would provide full In
surance on both the tanks and
their contents, which would obviate
any general average assessment"
for the purpose such as those to
which they are now subject. The
possibilities of full or partial pipe
line profits need not be gone into