Evening star., 1927-03-13
SURPLUS LOWERS
CRUDE OIL PRICES
STANDARD Official Sees No
immediate LesSening
of 0verproduCtion.
Rr the Associated Pres.

By the Associated Prese-
TULSA, Okla, March IA con-
tinuance for many months OF the
present large overproduction or crude
oil is looked for by Walter c. Teagle,
nresident of the Standard Oil Co. of
New Jersey. who arrived in Tulsa to-
day with a party of officials of his
company. They are on an inspection
trip of the Mid-continent field.
Until the reserve stocks OF petro-
leum now above ground are permitted
to function as real reserve 10 De
drawn on in place of new production
a higher oil market is unlikely, he
said.
"The potentialities already indicated
by such developments as have taken
place in the Seminole, West Texas.
Panhandle and California fields arc
so great that an upward trend IN
crude oil production is bound TO oc-
cur for several months. consequently
affecting crude oil prices adversely"
Mr.. Teagle remarked.
Forecast Is Difficult.
ANY forecast of crude oil prices is
extremely difficult at this time, as
current production is not the only fac
tor in making prices, as stocks OF
crude oil already in storag exercise
their influence, and these are at this
time burdensome."
Against this coming large crude
production, however, there is some re-
lief, as the consumption of fuel oil,
which for some yes - has been on
decline, turned II rd in January,
the Standard chier pointed out, and
will increase during the remainder of
this year.
The Standard man also exploded an
other popular theory. in saying that
regardless of whether or not all of
the Mexican fields were shut down
there would be no relief against the
present domestic production, as Mex
leo is only producing some 100000
barrels daily, which is less than two
thirds of Seminole's production, or
possibly one-half." He looked for no
material increase in importations of
Venezuelan oils, as facilities for TAX
ing this oil out of South America are
inadequate.
Price Jump Unlikely.
To-day" Mr.. Teagle said, ''the
United States Bureau OF Mines, the
American Petroleum Institute and
our trade papers furnish correct and
comprehensive information and analy-
sis of past and present statistical po-
sitions of the industry. There are
three principal statistical facts of equal
importance. These are the figures
showing stocks above ground. current
production and current consumption.
Almost every one in the oil business
is familiar with the figures as to the
latter two, but few indeed pay any
attention to the first item.
Every barrel of crude oil above the
ground today means more than it did
q few years ago, because crude Is no
longer our sole source of gasoline
The industry acquired the habit of
carrying large stocks before the
cracking processes became such an i'm
pof'tant factor in refining. Every bar
rel of crude oil in storage is the equiv
alent of almost two barrels in the
ante-cracking days. Under such con-
ditions an advance in the posted price
or the maintenance of a price no
longer justified, Is not in the interest
of the industry or even of the pro-
ducer himself
I'VE do not have to look back very
far to discover that advances in price
have stimulated new drilling, which in
turn increased production, with the
net result that the price had to be cut
when the new production was mar
keted."
To Test Gushers.
Gushers in the Seminole oil pool, the
greatest in the midcontinent area, will
be permitted to run to capacity to-
morrow and Monday to permit owners
to ascertain the potential production
OF their properties.
Because of a shortage in pipe line
and tank facilities, there has been an
enforced curtailment of production in
the field.
Mr.. Teagle and his party, including
w. S. Parish. president of the Humble
Oil & Refining Co., subsidiary, and
officials of the Carter Oil Co., the New
Jersey Standards largest operating
company in the midcontinent field. will
visit the field while the lid is off to
learn at first hand the probable po-
tential output of the area as a whole.
Officials of the Carter Oil Co. esti-
mate the present potential output of
the company's Seminole wells as
$4,000 to $4,000 barrels daily, although
the drastic curtailment program has
compelled it to hold it's actual daily
output below 10000 barrels. Early
last week this production was cur
tailed to around 80 900 barrels through
taking the air pressure off of some of
the biggest wells.