The Morning Tulsa daily world. [volume] (Tulsa, Okla.) 1919-1927, 1921-12-07
present and Future Prices
of Crude oil"
Ry w. IL CRAY

lilNlN nv QUO uufNllbn always up
permost In the mind OF tho oil pro-
ducer and that is: The prico OF to-
morrow. He asks himself the ques-
tlon--Shall ! start up the drill7
Shall l increase my drilling oper-
atlona1 Shall l discontinue drilling
for the timer His answer to these
questions depends upon what he
thinks about the future OF the mar
ket. am going to discuss the
crude oil market this evening be-
cause all OF you arc anxlously watch
Ing It's course.
The crude oil market responds
readily to the law OF supply and de-
mand, even more 40 than the price
Of refined products and the available
supply OF crude always affects the
immediate demand. The Standard
OIL company being the largest manu-
facturcrs OF refined oils and the
largest purchasers OF crude, fix the
price, and especially Is this true
when there Is an over supply which
has TO be stored.
THE Standard has always put the
price of crude oil below the average
cost OF production whenever there
was any large quantity OF oil TO be
stored. There are two reasons why
they do this: one which they give
and one which we all know, They
say II is to decrease drilling and
thereby curtall production. We all
know that the principal reason is
that the standard, like all other
buyers. want to buy as cheaply as
they can and the producer must
suffer when he over producers.
III there Is large quantity Of
oil going into storage, or IL there Is
prospect of large quantity of oil
going into storage, the market will
become sluggish, with a downward
tendency, and some fine day, when
you are hoping against hope, the
price will drop about so per cent.
The success of the oil industry in
the future depends upon It's ability
to both maintain and limit the sup
ply OF crude oil at and to the re-
quiremeuts of the world at fair
prices, and at price levels which will
he free from abnormal fluctuations.
l had rather produce, oil Mt price
range OF from two 10 three dollars
per barrel over period OF years
than to produce oil at from three to
four dollars per barrel for four or
five months and then produce It for
"a dollar n barrel for q year, while
the large buyers OF crude were
corralling tho over production
brought about by too much drilling
| due to ahnormally high prices.
The Independent producer more
/ than any other factor. can limit and
maintain at normal the production
| OF oil necessary for the worlds re-
| qu!rements. when there is n prospect
OF over production, and when he l.
! fully advised that there are large
/ quantities OF oil going into storage
/ by limiting drilling operations. In
order for the independent producer
70 properly steer his course. he
should have before him at all times
accurate and reliable information as
to the amount OF production in the
various districts OF tho United States
and Mexico. The oil industry TO-DAY
ls compelled TO rely upon the sta.
tistical information furnished by the
buyers of crude for his guidance In
determining the extent OF his drin-
ing operations. Ii matters not
whether he gets his Inspiration di-
rectly from 26 Broadway or from
any one OF the various trade journals,
Il is the same thing, the information
comes from the buyers OF crude
and usually from some one OF the
standard group ! do not wish 20
convey the idea that l am offering
any criticism Of the various trade
journals OF the industry, on the
other hand, rather would l COM
mend them for the accuracy OF their
information, considering the source
from which they are compelled 10
obtain Il.
I'm order that the supply OF
crude oil may be conserved and that
portion OF It not needed for !mmed!-
ate consumption he kept ia it's nat
ural storage. tho United states,