San Antonio light. [volume] (San Antonio, Tex.) 1911-1993, 1923-08-19
PREDICT CUTS
IN CRUDE TO
COME NEXT
Fears Of Producers and Re-
finers Prove Well
Grounded.
INCREASE In OUTPUT
Inexorable Law Of Supply
and Demand Asserts
Self.

Establishments of the crude and re
fined oil price structure is under way
What both producer, refiner and mar
keter as well feared would happel
has actually come about and almost
over night the level on which the mar
ket has rested has begun to crumble,
Lower prices on retail gasoline is al
ready a fact. Lower prices on Mid
Continent crude, according to students
of the situation, seems inevitable.
The memorable law Of supply and
demand has asserted itself. Instead oil
beginning at the source of supply, the
re adjustment has started with the
finished product-motor fuel. The an
nouncement by the Standard Oil Com.
pany of Indiana of a reduction of &C
cents a gallon on gasoline effective
August ii throughout the eleven
states in the North and West, but fore
shadows a drastic reduction in the
price of crude at the well, not only in
the Mid Continent field but elsewhere.
Some observers are open in their dec
laration that the crude reduction Will
go as low as so cents under the pres-
ent schedule. Others are a bit more
optimistic and hope for less drastic
cut. At all events. it is general opin-
ion that a cut will come.
Have Two Alternatives.
The principal purchasing agencies
in the Mid-Continent territory are
confronted with two alternatives,
either further prorate their purchases
or abandon the practice of proration
altogether and substitute therefor a
new and revised schedule of prices,
in line with consumption, excess pro-
duction and available storage being
taken into consideration. The latter Of
the two courses appear at the present
time to be the one that will be taken.
The Prairie and other purchasers have
already prorated their crude takings
to an extent that producers in many
quarters have become convinced that
their own interest would be better
served if all of their production was
purchased at a lower price rather thar
only a portion of it at a higher price.
Then, too. further proration of runs.
on the face of it, would offer little and
to the situation.
Output Shows Increase.
While a general slump in the pro-
ductlOn OF the various sections was
anticipated for last week, net in
crease of almost 10000 barrels a day
is shown by figures compiled by the
Oil Weekly. The average daily output
of the state for the seven-day period
reaching 2.264,60S barrels.
With further losses reported from
Oklahoma and other Mid-Continent
sections. it was evident that curtail-
ment efforts were reaping some re-
suits, until the figures from California
showed that n net increase of 21.000
barrels was made in the states dai.y
average for the week.
Just as curtailment begins to show
its results in the light oil area OF
Tonkawa, Okla, operators in this
field have announced their intention
of launching the largest drilling cam.
paign yet promulgated in that state
1t is expected with these campaigns
under full swing that thes production
of the state will again mount past the
10000 barrel day mark. At present
Oklahoma 's-daily recovery of crude
oil has dropped to around All 900 bar
rels. This is the lowest figure reached
since the latter part of 1922.