The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1905-09-08
WHY OIL PRICES ARE CUT.
Standard Is Saving Money Here to
Fight Abroad.

anu ali the standard Oil writers to as
cribe the present condition of the oil
industry in Kansas, Indian territory
and Oklahoma to overproduction. The
statement has been freely made that
the markets of the world are flooded
With oil; that more oil is brought to
the top of the ground than there is
any demand for, and until the drills
were stopped there could be no hope
OF an Improvement in prices. Pro-
ducerS have been compelled to accept
these statements in the absence of
definite information of their own.
through Herr Jannsen, Berlin d.
rector of the Shell Trading and Trans
port company, r. G.. Rawlings of this
place has received number of issues
of London oil publication which
gives the figures of the worlds pro-
auction of OIL According to this pub
LEGATION, and the accuracy of the
figures is vouched for by Herr jam
sen, the production of crude petroleum
in Russia in the first six months of
this year has fallen off enormously.
The strikes and labor riots in Baku
and other places in the Russian oil
fields began last winter and have con-
tinued without internission. The pro-
ductfon of oil at Baku has been prac-
tfcally at standstill for months. Much
property of the producers has been de-
stroyed. There is no way of arriving
at the loss of production for the year,
but it is estimated at more than Is
million barrels up to August 1.
No New Discoveries.
There has been no foreign field dis
covered to offset this tremendous loss.
While operations have gone ahead in
the Roumanian and Galician fields and
new wells have been sunk in India,
Java, Borneo and Japan there has
been no great increase in the worlds
visible supply of oil. The figures show
steady increase in the production of
the Asiatfc fields, but it is slow. The
new wells but average up the supply
because the production of the older
wells, as has happened everywhere
else in the world, constantly grows less.
There has been vigorous prospecting in
every European and Asiatic field and
yet new production is extremely small
In this country the Kansas terri
tory field furnishes the only example
of a great increase in oil production.
In Pennsylvania there has been an in
crease in certain districts, notably the
Bradford district. For the whole
state the figures will show the usual
decrease, which has averaged more
than one-half million barrels annually
for the past five years. California has
been in quiescent condition for near
| ~ all of this year. Production has
not increased to any material extent.
Ohio shows a falling off from last
years figures.
Decrease in South.
Texas-Louisiana figures for August
show decrease of one million barrels
| in production for one month, to say
nothing of the three million barrels
which have been destroyed this year
| in the TexaS-LouiSiana territory by
fire. The big wells at Humble which
started out with 10000 barrels and
$4,000 barrels of oil day are now at
the stage of 1000 barrels and 1000
/ barrels production. This average is
steadily growing less. Louisiana fig
ures this year will show an increase,
| according to the estimates of a re-
liable statistician in that field.
But all of the increase in oil pro-
duction in the United States Will come
from the fields producing the cheap
est grades of oil. The oil of the gulf
coast districts and of California are
very low grade and are really fuel
4 oils. They are used by the Standard
| Oil company and others in the re-
f1neries in competition with cheap for
eign oil and are sometimes mixed
with high grade oil and sold in this
country as high grade illuminants.
Kansas Field Best.
The only high grade oil field in the
world which demonstrates its capacity
to supply the demand for high grade oil
| is the Kansas-Territory field. 1t is the
one place where the future supply is
certain, because the surface of the
proven oil bearing area has been bare
ly scratched 1t is capable of supply
ing hundreds of thousands of barrels of
oil daily if it had market for the
output and the facilities for handling
| thaJ amount.
There is no real overproduction of
high grade oils. The Standard is in a
fight for the control of the foreign mar
kets and its competitors, chiefly pro-
dueers of low grade oil, have cut the
price of refined oil all over the east and
in the European centers. To meet these
prices the Standard has to make the
producer pay the cost of the very ex-
pensive fight it is carrying on. That
Is just exactly what it is doing on the
authority of eminent foreign oil men.
The Standard is trying to force the
Shell companies and its allies out of
i the markets in the east and in Europe.
1t is using it's monopoly of the oil bust
ness in this country to furnish the
weapons to crush it's competitors.
Though prices of refined oils have been
stedaily reduced abroad they have been
held up in this country.
Standards Storage.
The Standard now has in the Kansas
Territory field more than million bar
rels of oil in storage. This oil cost it on
an average of fifty cents barrel AT
the prices which ruled a year ago the
oil would have cost it an average price
of seventy cents a barrel. Thus on the
oil now in storage, the producers are
only small matter of million dollars
shy" The loss to the producers aver
ages more than $1,000 for every day
that prices remain as they are That
is the amount OF tribute the Kansas
Territory producer is paying into the
treasury of the Standard Oil company
to crush independent competition in the
other parts of the world That is the
situation which has made the producers
in this field squirm for the past yea1
| and there appears, at this time, little
hope of early improvement in prices.