Imperial Valley press., 1925-03-20
BABS0N DECLARES PETROLEUM
PRODUCTS CONTROLLED BY THE
LAW OF SUPPLY AND DEMAND

4 BARSON PARK. Mass, Mar. 20.
Roger w. Rabson today issued
another section Of his survey com
lnenting on conditions in the eight
mountain states and their relation
TO the oil industry.
N "Crude oil, gasoline and other
B petroleum products are subject
n first of all 10 the law Of supply
Aand demand, says the statistician.
h"lf We had constant Supply,
Rprices go up or down as the demand
Fincreascs or decreases. But the
supply meantime is increased by
|#ncw wells coming in and improved
Afmchods of refining and distribu-
1stion. Owing to the increasing
plumber of automobiles and the
n widening uses for crude oil. the de
Fmand must also continue i in
Icreas" for some years to come.
Thcruforc, unless some much cheap
Ter or more efficient method of re-
Afining IS developed, the price can
"a be checked primarily only by new
escil fields being developed. This IS
Npreciscly what happens. The price
%goes up until i pays to develop n
new field. When such a new field
opened up the price falls until
Ethe temporary surplus, whilgh this
Enew field produces, is needed and
consumption again catches up with
Eproduction.
N coil exists nearly everywhere,
Ethc only uncertain point being as
Ito how far ono must drill 10 get
lit out. In somc scctions-lke
oklahoma which is producing m
average of 100000 barrels per day
-thu oil i, comparatively near the
surface; in other scction9--like New
England-thc ell is SO deep that it
may never pay TO drill it, while in
the mountain states oil is deep but
drilling il now paving. For instance,
these eight mountain states ~ now
producing about 100000 barrels per
day with oil prices very low. As
oil prices advance, it viii become
more profitable TO develop new
fields in Colorado. New Mexico,
Arizona. and othar states, and
then q new big area will be proauc-
ing. This viii agaiu force prices
down until consumption catches up
again with production.
Oil tho Big Thing
This means that Il il a.orrct
TO say that Oklahoma has. norc oil
than New Mexico. Both NAV have
Nideuical amouptL the difference
h. les in the fact that the oil is near
" T." surface In Oklahoma aud it
il unnccessarv to drill 50 deeply 40
Is The ease of New Mnv;co. well
remember when only wells 1000 feet
deep existed. Then the price of
oil gradually decreased. until it naid
to drill 1000 feet. Drilling 2000
feet brought in an entirely new
group Of oil fields and production
for while exceeded consumption
accompanied bY falling oil prices.
As the demand Increased. III" price
again rose mtl it paid to drill
1000 fcet. Drilling 5000 feet
brought in other new fieljs and
again. owing to the iucrcae" pro
duction, n" price fell. But the de
mand continued to increase and
again eonsumption caught up with
production. Then oil prices again
began to climb until it paid to bogc
still deeper which brought in a
new field with another period of
declining prices. Such q period We
have just been through. But once
again consumption has caught un
'aud again prices are going uPward
Moreover this upward movement
viii continue until it PAYS To drill
still dccpcr,-say 5000 20 6000 feet
Such Il time will soon come and
then the states Of Montana, Wvom-
ing, Colorado. Idaho, Utah, Ncva-