Evening star., 1924-02-13
OIL Being HELD UP
FOR HIGHER PRICES
Refiners Face Struggle in
Getting supp!ies-S5,0o0,-
600 to Be Spent in Drilling.
BY j. G.. ROILE.

Special Dispatch to The Star.
NEW YORK, February 1S.-The in
dependent oil rcfiners declare that
their struggle to keep both ends or
the market from meeting in the mid
die" has returned. Producers and
holders of spot oil are loath to turn
1t loose at present prices. This is
true in the Pennsylvania fields, in the
Arkansas and Louisiana district, in
the mid continent field, in Texas and
in the Colorado Wyoming and Mon
tana sections. In each district pro-
ducers are confident prices will go
higher.
In the mid-continent section, for
example. holders are hanging on even
with crude at $3.50 barrel, and a
50-cent premium over the posted
price on 80 gravity and over.
The producers and spot oil holders
have just gone crazy with the rapid
advance of crude and are attempting
to anticipate further advances much
faster than the market Will allow
refiners to advance prices OF refined
products, one middle west reflner said
today.
This was confirmed by the presi-
dent of Il cleveland refinery, who
said in connection with the recent
jump IN SaSollne prices: baSolihe
was below the cost of production
when the increase in crude prices
started,
Drilling Being Rushed.
\ lot of oil picked up in north
Texas a few days ago at 3O-cent
premium was rated as bargain and
one owner of 100000 barrels of spot
oil in storage at Wichita Falls in the
last week is known to have refused
fatty to consider an offer of $3.50 a
barrel
AS result. drilling operations are
being rushed in practically all the
oil fields of the country. To this
fact to some extent is due the
shortage of fuel oil in certain sec
tions. In some parts of Texas quota
tions on this product range from an
absolute minimum of S1.35 a barrel
TO S1.50. as heavy requirements for
drilling purposes have been added to
the usual heavy seasonal demands.
Out of the tightening up of the oil
situation will come, it seems ex
tremely probable, the biggest de-
velopment program California oil
companies ever have undertaken. All
the. companies there now are zeal
ously seeking new fields, and il is es-
i, the next six months by the Standard
Oil of California alone in wild cat
ting. The Union, the Associated.
the Shell and other big companies
velopment programs.
Crown LOt' Firms Gone.
The town lot" and "shoestring"
oil companies, which last year were
responsible to Il large extent for the
California overproduction, have al
most entirely disappeared from the
Long Beach Huntington Beach and
Santa Fe Springs fields. These COM
panies. many OF which left most
unsavory trail behind them, sunk
q
fields. In order TO prevent their
wells from draining the oil pools,
the large holders alongside We're
compelled to sink offset wells. with
the result that a food of oil. which
overiiowed the market, was produced.
The unsavory aftermath of the op-
eratiQns of some of these shoestring
companies arose from the fact that
while some of them got producing
wells, their stockholders were not
permitted to benefit to the extent
which said stockholders and state and
federal authorities believed they
should.
Investors Heavy Losers.
In some instances huge sums were
paid by promoters to themselves as
Salaries 1t is charged. In others, |
promoters, who got their stock for
nothing or for a'price under that paid |
by the general public, are alleged to
have used the bringing in OF new
"tliS ~ lilttH puldtt the slDth anu
unload their holdings at a price to
show a profit to them. but not high
enough TO allow the legitimate stock !
holders to sell.
Federal authorities, aided by the !
state corporation commissioner, are
known to have been gathering evil !
dcnce III many cases and to be pre- |
pairing to ask for flood of indict- !
mentS.
California producers, however have /
had a Slice of eastern markets and |
Will not relinquish their hold on those |
mal kets without struggle, aided as !
they are by cheap transportation !
through the Panama canal and the |
Mississippi river and other waterways |
reached from Atlantic anu gulf ports. /!
A Fool and His Money. |