Evening star., 1924-08-23
OIL OUTPUT |SFAR
AHEAD OF DEMAND
Gasoline Stocks Still Pile Up
in Spite of Recent Price
Reductions.
BY j. c. ROYLE,
Special Dispatch to The Star.

Sptfial bispalcn 10 Inc star
NEW YORK, August 23.-"Captain
stop the ship; l want to get off anG
walk" That time-worn jape still
represents the situation Of the oil in
dustry in the United States. For the
oil industry cannot walk while oil
is running at its present rate, and
efforts at curtailment in one section
are nullified in most part by in
creased activities in others.
The present rate of production is
around two million barrels a day, the
highest level of the year. Consump-
ton is higher than ever before, but
not so high as output. Stocks of oil
and gasoline in storage, therefore
continue to pile up. undeterred by
recent cuts in prices of crude and
occasional reductions in the quota
tions for gasoline.
More automobiles are running on
the streets and roads of the United
States than ever before. More ves-
sells are being changed from coal to
oil burners, but there is little indi-
cation that consumption will be suf-
ficient even in the height of the
touring season, close at hand, to
make serious inroads into these re-
serves. Clines and anti-clines. deep
er oil sands and shales are being
pectors of the oil industry, and new
producing wells are being opened up
despite the fact that the large COM
panies have reduced new drilling
operations to minimum.
Driller. Refuse.
Prices still are averaging some
what higher than at this time last
Summer and profits of some COM
panies undoubtedly are greater.
Short tenure of leases is the difficult
ty the industry has to contend with
at present When holders of leases
have only a limited time in which to
draw the black gold from beneath
the surface, they are unwilling to
halt whether the market for oil is
flooded or not. Adjoining property
owners are therefore compelled to
continue production in self-defense
in order to prevent the oil lakes be-
meath their ground from being
drained through another hole.
Extensions of the Torrance and
Dominguez fields in southern Cali
fornia and of the Buena Vista field in
Kern County have served to check
the steady decline in California pro-
duction, which has been in progress
since last October, when the flow
from the West was affectingI every
market in the country.
Huge Gains in Output.
July production figures for Cali
fornia Just available showed an out
put Of 19,274,755 barrels, a gain of
nearly half a million barrels over
June Estimates so far this month
indicate that the increase over the
Junes figures has grown rather than
diminished Also the larger COM
panies are engaged in vigorous wild
cat operations, the most active OF
which are centered in the Kettleman
Hills district, where deep test wells
are being sunk.
Consumption of the California
product has fallen far below produc-
ton, which oil men in other sections
regard as a dragging weight on the
oil price kite. Stocks of crude oil
on hand in California at the beginning
of this month totaled 101, ,462,22 bar
rels or about ten million above the
surplus available the first of this
year. This is attributed in the West
to less use of fuel oil by railroads
and the smaller number of tourists
which visited California early this
Summer.
Price Increases In West.
Additional cuts in the prices of
crude oil have been anticipated in the
Midcontinent field. But, strange as
it may seem, this prediction has
served to strengthen the tone of gas
oline and kerosene in Oklahoma,
Kansas and Texas. In fact, material
increases in price are anticipated by
those who allege that jobbers have
held off in expectation of a further
cut in crude and have been forced
by increased demand to purchase
hurriedly for temporary requirements.
Refners, however, are most con-
sarEattye- in their ideas over the-long-