The Morning Tulsa daily world. [volume] (Tulsa, Okla.) 1919-1927, 1921-03-11
Crude Price Entirety
in Hands of Producers


The concerted action OF the pro-
durers In the midcontlnent fields
during the last month, through the
management of the Mid Continent
on Gas association, has certainly
worked wonders and no mistake.
When the first work OF organization
was begun by that association, tho
producers were selling from so to
70 per cent OF their total produc-
ton, and were either having to pro-
VIDE storage. or pay excessive stor-
age charges TO the large companies
for taking care of the balance.
In the small period elapsed, won
derful results have been achieved,
and the first orga nization of oil pro-
ducers ever effected In the history
OF the industry has been effected
The pipeline companies are now all
taking 100 per cent of the oil. and
paying for same, except tho Prairie,
which has never changed Its pro
rating order OF 10. per cent, bu,
which Is reported to be taking all
the oil In most places. or course,
tho price OF crude Is far from satis-
factory. however no one can deny
that the immediate change which
has been brought about toward the
betterment of conditions In general
Is very great. Refined products
have also felt the change, as easo-
line. which brought 13 cents few
weeks ago, IL reported to be selling
as high as Is cents per gallon at
present. and fuel oil has Increased
from rs cents TO s1.00. Therefore,
the results obtained from united ac-
tion are certainly self-evident.
The immediate problem which
now confronts the industry Is to
bring the price OF crude back to D
price which will mean satisfactory
profits TO the oil business in gem
eral and the proposition now lies
entirely in the hands of the produc-
ers. In the past few weeks the Gulf
Oil corporation has issued s35.000.-
900 worth of bonds, tho Humble oil
corporation s35.000,000 worth OF
stock or bonds, The Texas Company
100000 worth of stock or bonda
the Sinclair interests have formed q
s20,000.o00 corporation. the Doher-
~ interests n $10,000,000 corpora
ton, and all OF the larger corpora :
tions are sitting back with large cash
surpluses all ostensibly ready to buy
and store the high grade crude at n
low price, and hold same for the
higher rates which are bound ia
come. The producer is still the cri-
terion who definitely commands the
situation, and who can say definite
ly how long a period must elapse be-
fore these higher prices come and
the oil business In again the profit
able business II has been for the
past two years: or he is the one who
can keep Il in its present depressed
condition. -
The estimated production Of the
midcontinent field is now approx
mately $4,000 barrels per day, ap-
proximately $4,000 barrels less than
II was in December. and approx
mateiy 100000 barrels less than II
was In August Of last year when the
shortage of gasoline was so preva-
lent, and when a system Of rationins
gasoline was in effect in California
and Kansas 1t can also be safely
said that tho development In the
midcontinent field is at least four
months behind what II would have
been II conditions had continued
normal, so It IL readily seen that the
prospects for the immediate future
are exceedingly bright in every re-
spect.
Spring will bring with It the In
creased demand for gasoline and pc
troleum products, due to increased
auto travel, and there Is no doubt
but that prosperity Is rapidly return
Ing 10 the other industries IN the
United States, and that the factories,
which afford a market for fuel oil,
are fast opening up, and indications
point to an early normal resumption
81 all business activity. Incidentally
n might be stated that during the
winter months, when the fuel oil
market was the strong factor, the
Mexican crude could be substituted
for the midcontinent fuel oil; how
ever, tho gasoline content OF this
imported Mexican oil is almost neg
ligible. therefore. II cannot be sub
stituted for the higher grade mid
continent crude In the making OF
gasoline,
From the above facts II Is obvious
that the business OF producing and
refining oil is on the Threshold of
prosperity, but that the time which
Is necessary to bring about that pros
perity rests entirely in the hands OF
those who produce the oil, and II Is
up 10 them to keep their production
at n figure where IL will not flood
the market and cause a surplus, but
will naturally be absorbed by the
users OF the products; and therefore
obtain a fair price and fair profit for