East Oregonian : E.O. (Pendleton, OR) 1888-current, 1921-07-06
LESS DEMAND REDUCES
PRICE OF CRUDE OIL

MOl- VI VNOGL VII
OIL CITY, Pa, July Sd N, So |
independent oil refinors, although |
that prices paid for Penn
sylvania crule and other grades pro- !
duced in the east are way down. are
themselves placed in position where
they are operating on basis that af- |
fords Il very narrow margin between
a profit and loss and are so loaded |
up with refined products for which
there is no market that the conditions
of less than six months ago, when
the independents We're constantly bid
ding up the price of crude until the
Pennsylvania grade reached the topl
figure of S6.10, are today taking as
little as possible With Pennsylvania
crude oil down to s2.50 a barrel--the
lowest price in over five years--it Is
again being demonstrated that it is
not price but demand that sells any
product. And that demand, excepting
in the case of gasoline, is conspicuous
| by its absence,
\ well-known local refiner and job
Der of crude and refined oils today
! pointed to the fact that refinors who
but six months ago We're bidding
against each other in an effort to Sc
cure PENNSYLVANIA crude are today
i loaded to the limit with refined pro-
ducts and going into market where
keen competition for prospective buy
ers has been forcing the prices down
20 dispose of stocks that have taxed
1 forage facilities to the limit, in order
to avoid being put in position where
they would have to stop buying crude
and shut down.
Every price cut by Il JUbber or re-
finer" stated the local man, makes
the situation more acu,e. a refiner
may make special price in order to
move some given line with which he is
overloaded. This is pie for the buyer,
who, regardless of the conditions that
have forced the seller to make the new
low price. Immediately stands pat on
that price With all concerns, and thus
the lick of demand has been slowly
but surely forcing down values for
finished products.
''As mater of fact" continued the
local oil man, the present cut in the
price of crude had already been large
ly discounted by cuts in the price OF
the finished product the past few
days"
Western Competition Hurts.
Although there are several refincrs
who are continuing to operate their
plants it was pointed out, the opera
tions are not netting any protis, and
some who do not want to sever con-
nections with their source of supply
in anticipation of Il revival of busi-
ness, actually doing business at q
loss.
The producer is the man who right
now is getting the worst of it-espe-
cially those who bought production or
drilled in new production the past two
or three years.
The refiners stated the Internation'
al News Services Informant expect
ing under extraordinary conditions
usually buys and sells al the market
The producer who drilled at the peak
If the market prices and correspond
ingly high costs is faced even II he Is
able to carry his load, with the posi-
bility of having to wait a good many
years before he can begin showing a
profit on his wells.
As to where prices will eventually
so, nobody seems willing to predict oi
guess. There is naturally the pessi.
mism that comes with a cut, and some
profess to see further drops in sight
Others. more optimistic, believe thai
even If there should be further cuts
they will not be for any length oi
time, as the curtailment of operations
and productions and the prospective
revival of business are expected to
cause turn.
So far as the better grades of crude
oil are concerned there has been no
increase in'the supply available, eN-
4 septing in stocks on hand. Western
crudes have been brought into the
market in increased production, and
gasoline from these CRATES, although
not to be compared with the high
grades refined from Pennsylvania
oils, are laid down at eastern points
1t price that makes them formidable
competitors with the eastern grades.
Aside from the demand for gasoline
there is but a limited sale for lubri-
cants and other crude by-products at
this time. Just what this means to
the reflner. it is pointed out, is APP
parent when it is stated that for
every barrel of gasoline refined from
Pennsylvania crude there is a sur
plus of other products that must eth
er 90 into storage or be sacrificed in
price equivalent to aboat two barrels