The San Francisco call., 1910-12-28
PRODUCERS | Lower
SURPLUS OF OIL
Between Z and s Per Cent of
Output Goes Into Storage
at Present Time

Fears that an oVerproduction Of oil
had created a storage supply that
might at any moment inundate the
market were relieved in measure yes
terday when the announcement was
made that the surplus output was less
than S per cent OF the whole produc-
ton This figure was given out author
itatively as the result Of a compilation
that had been made with the greatest
care.
The oil market has of late been in an
uncertain condition with the over
hanging shadow OF a growing surplus.
In order TO reach conclusions that
might have the merit of accuracy local
agencies undertook q systematic inves-
tigetion. The quantity now going into
storage is given as between : and s
per cent OF the output.
During the last few months there has
been a curtailmen: in the larger fields
OF the state. There has been a cessa-
tion Of drilling activity. although de-
velopment is proceeding along normal
lines. Some wells have been capped
and others held down.
PROBLEM OF STORAGE
A pressing problem. IS storage. The
STANDARD is credited with IS, goo. 900
barrels in warehouse, and the Inde-
More tanksge is imperative The inde-
pendents are hurrying work on their
big storage tanks at San Luis Obispo,
but these viii offer only momentary
relief
Reports are current of several i'm
nense contracts and rumor has it that
in making them there has been a shad-
iEg OF price. Heretofore there have
been few sales below IS cents a barrel.
but it is now reported that recent
deal calls for a lower figure.
The report was circulated that the
price was as low as 55 cents. but this
has not been confirmed. The subject
has awakened the interest Of electric
power operators. At IS cents. oil and
electric power We're in keen competi
ton. Some OF the large manufacture
ing establishments on the coast adopt
ed electric power 20 save the initial
expense Of installing the oil burning
machinery.
Rumors Of a 55 cent rate on oil have
caused electric power men 10 figure on
oil as a generate of power in compe-
tition with water. The auxiliary plants
use the petroleum fuel and basis OF
comparison is not far to seek.
STANDARDS OIL AND GAS
The STANDARD oil company is Offering
so cents az the well. but it is stated
that few operators have been willing
70 sign at this figure. The agency GER
tifcates carry a guarantee Of 30 cents
and the storage. il is felt, will not eat
up the difference.
The operations of the California
natural gas company in Kern county
are being watched with keen interest
The company. popularity understood "a
be a subsidiary organization Of the
Standard. is arranging TO pipe the gas
from the wells in Buena Vista hills into
Bakersfield The price which the
gas viii be retailed has not been an
nounced. but it viii be far below the
current rates.
The extension OF the system viii de-
pend entirely upon the production OF
. the Buena Vista wells It is vel
known amSng local operators that the
STANDARD regards its gas wells as
among its most promising assets. Tall
Of pipe lines TO the large centers OF
the state for the distribution Of gas i:
prema ture. That the Standard has
some such plan in mind il the supply
can be adequately developed, however
is certain.