Evening star., 1932-10-27
APPEAL IN TEXAS
OIL CASE IS SEEN
Law Giving State Power to
Control Output May Be
Tested Further.
BY the Associated Press.

BY the Associated Press.
TULSA, Oklahoma, October 27-Sev-
eral related situations have brought un-
easiness to the midcontinent oil area.
The industry was jumpy over the pos
,, sible effects Of the three Judge Federal
Court ruling in Texas that upheld the
power of the Railroad Commission to
control physical waste of crude, yet
frowned upon its specific orders curb
ing the flow from East Texas.
interpretations which held the ruling
applied only to wells of a specific group
of complainants served to ease this ten
sion only slightly.
The area saw an uncontrolled flow
of oil from East Texas depress crude
oil prices to the 1O-cent level.
Appeal Is Expected.
While an appeal from the Federal
District Court ruling is expected to join
appeals in other actions to await final
determination by the United States Su-
preme Court, the possibility that an
adverse decision might come from that
high source increased the nervousness
of followers and supporters of the
Texas law.
Operators also scanned with some
apprehension the Oil and Gas Journal
! and American Petroleum Institute pro-
duction figures for last week, which
| showed substantial gain despite re-
! cent rulings of regulatory bodies that
had been expected to curtail output still
| further.
The Journal reported Oklahoma pro-
duction about 10000 barrels day above
that allowed output of $4,000 barrels
| that of Texas more than IS 600 barrels
more than railroad commission orders
| permit, and California almost $4,000
| barrels above the allowable
The Texas maximum had been fixed
at less than 100000 barrels, while Cali
| fornia operators were expected to with
draw only 440, 900 barrels a day the re-
mainder Of 1882
| The result Of the excessive flow was
to bring the average for the week to 2
| Isl .289 barrels day Holding to allow
! ables by operators in the three States
| mentioned would have cut this by 141.-
600 barrels, and brought production to
the vicinity of the 2000, ,000-barrel Level
! considered almost universally here to be
a sale one for the rest of the year.
Ihe increased flow, plus the Texas
court ruling, was felt keenly by oil COM
panies that have advanced crude oil
prices and those OF refined products in
the last two weeks and sought, by ex-
ample and exhortation. to bring certain
major firms to their viewpoint.
Two Standard Oil companies Indiana
and New Jersey, contend the price of
$ll2 top for the midcontinent cannot
hold, due in large part to excessive pro-
duction. They maintain a top price of
only 81.
Refinery Market Stronger.
Independents and other majors have
! based their contention that an increased
| price Is justified on the recent rulings
| OF regulatory groups that were sched-
uled to hold output to 2,000, 900 barrels
| On the strength of the expected re-
| duction in output the refinery market
strengthened, and this increase in turn
was passed on to tank wagon and retail
prices for gasoline in the Oklahoma and
Texas territory.
Prices for United States motor grades
Of gasoline advanced approximate tely
three-fourths of a cent in tank car lots
and today were just steady at Az to
a.. cents gallon for the low octane
grade.
A distinct movement was afoot to ad-
vance the low grade to a scent tor
which was nipped by the Texas court
ruling.
While the uneasiness had no,
reached the crisis stage today, all oper.
ators. major and independent, were
| feeling their way cautiously and watch
| ing closely developments in Texas.