Tulsa daily world. [volume] (Tulsa, Indian Territory [Okla.]) 1905-1919, 1916-04-09

consumption Of gasoline in the United
States during 1915 was % per cent
greater than In 1914. and that there
will be like increase in 1916.
OBJ Increase In exports.
tc) The depletion of gasoline stocks
due to increased domestic and export
demands. on January |, 1915. re-
finers had stocks of gasoline in stor-
age amounting to at least 1000, 600
barrels. Inquiry today indicates that
there Is little gasoline in storage.
td) Decreased production Of crude
containing large percentage of gus
oline as in the Gushing pool of OKLA
homa. the daily production of which
declined from more than 100000 bar
rels in April, 1915. to less than l00,-
600 barrels in January. 1916. The
decline OF the Gushing pool was par
TALLY compensated for by an in
creased production Of crude from
other pools. the gasoline content of
which production, however. was from
to per cent less than that of the
Gushing crude.
The stocks of Gushing crude. while
from 100000 to 100000 barrels
larger at the end of 1915 than at the
beginning of that year. reached their
maximum In July. This surplus is
now being drawn on to supply the
shortage represented by the differ
ence between daily production and eX-
listing transportation and refining ca
pacity. and thus until exhausted this
surplus tends to steady the oil mar
ket. These stocks, however, are con-
trolled by the stronger companies,
and have been withdrawn from the
open market. Thus. while there is Il
market shortage of Gushing crude,
which Is directly responsible for some
of the Independent refiners paying a
premium of from 20 to 80 cents a
barrel above the quoted market price,
other companies have not exhausted
their 1915 surplus of Gushing crude.
Since these larger companies have in
fact larger stocks than year ago II
follows that with them the shortage
of gasoline-rich crude is at most only
threatened and to the extent that
these companies are using their 1915
surplus, the threatened shortage is
not yet factor in increasing the cost
Of gasoline production.
(e) Increase in the price of crude
oil.
(f) Financial influences. The re-
cent, rapid increases in the prices of
crude oil and gasoline have been ac-
companied by rapid increases in the
market quotations of oil company
/
capital stocks OF 3S corporations. of
which 35 are in the Standard Oil
group and three are typical large in
dependent companies. have increased
remarkably In the last six months.
The extent to which the rapid and
extraordinary rise in the price of gas
Oline can be traced to causes related
to supply and demand has been indi
Gated above. A conclusion justified by
a review of the years record in the
oil industry is that the selling price Of
gasoline is fairly responsive to the
supply and demand for gasoline but
is less directly related to the actual
supply of crude oil. Attention has
also been directed to the possibility
Of other contributing factors, with the
result that the evidence at least sug-
gests that increasing profits to the
larger refining corporations have ac-
| companied the upward trend of gaso-
| line prices.
The obvious fact is that the refin-
Ing and transporting companies that
| are strongest In business foresight and
! financial backing take advantage Of
both the falling and the rising mar
| kets in crude oil to strengthen an al
, ready strong position by purchasing
both stocks of crude and producing
properties. Under these conditions a
market shortage Of crude may de-
velop which is not wholly warranted
| by facts Of actual production, yet it
no less surely leads to higher prices
In both crude and refined products.
This furnishes the opportunity for the
| well-supplied refiners to sell at the
higher price gasoline which is derived
| from crude oil purchased in a lower
market.
| The net result of this clearly indi-
Gated business policy is that the con-
sumer of gasoline pays a price, which
in the case Of the companies control
ing the larger stocks of crude oil is
not necessarily determined by the
price paid to the producer for the oil
from which the gasoline is obtained.
The smaller refiners on the contrary,
less favored with transportation and
storage facilities and ready capital,
may be dependent for crude upon the
current market.-Motor Print,