Evening star., 1932-01-28
OIL TRADE REVIEW
. NOTES PRICE DROP
Industry Retained o7.5 Per
| Cent of Its Business in
1881, However.
BY WILLIAM VOIGT, Jr.,
Associated Press STAFF Writer.

TULSA, Okla, January 28.-Amaz-
ing features of the oil industry through
the year Just ended are pointed out in
the forthcoming issue of the Oil and
Gas Journal.
After a statistical review that covers
virtually all angles of the industry, the
periodical concludes that If any return
of normal business conditions is gen.
orally experienced in 1882, the oil in
dustry must. because of its peculiar
position reach a peak heretofore never
approached.
Even with the contraction of business
in all other lines there was an eXpan-
sion in the use of motor fuels and the
oil industry through 1881 retained 975
per cent of its total export and domes-
tic gasoline market.
Refiners' Return.
The Journal notes, however, that the
refiner received an overall return per
barrel of less than $l.l0-the lowest
prices in years and from 25 to 40 per
cent lower than in l930-and indicates
the principal reason for the turmoil
last wear was because Of the terrific
volume of "oyerhanging potential
crude oil production.
Il was beacuSe of this overhanging
potential that fewer wells were drilled
Tor oil and gas in 1881 than in any
yea- since 1898.
In spite of the feveriSh drilling cam
paign in East Texas, which was the
only field that had more compilations in
1881 than 1890. only l2,245 wells were
drilled in the United States last year.
or these. 6.7O3 were oil wells, 1882
were gas wells and 1850 were dry holes.
.Completlons in 1880 totaled 2l,240, Of
which II, $40 were oil wells. 1856 gas
wells and 6,734 dry holes. The 25-year
average has been more than $4,000
wells
When the year opened there already
was a large overprOduCtion of oil, and
East Texas lOomed like an approaching
tornado on the horizon. Curtailment
was in effect or under discussion in
every. oll-producing State, fear of East
Texas and the threat of starvation
prices held back exploratory and de-
velopment work. Only must wells
were drilled.
Active Wells Decrease.
The number of active wells decreased
from 327,268 in 1880 to 299, l04 in 1881,
but some of this was due to voluntary
shutdown because of low prices. Many
new producing spits were found in
Southwest Texas, the Gulf Coast and
in Kansas. but were not developed.
Total production from the United
States, 845. 100000 barrels, was the
lowest since 1926, but the average flow
per well per day was IT'S barrels, as
compared with 76O barrels in 1890.
Potential production has been eSti-
mated at 100000 barrels a day. In
one day last August East Texas alone
produced more than 100000 barrels,
but this was while Oklahoma wells were
shut under martial law and just before
Gov. Ross Sterling clamped the martial
lid on East Texas.
The result of the overproduCtion was
felt in every division Of the industry.
Average open market quotations on the
principal refinery products were the
lowest for any yearly period since
petroleum refining became one OF the
major industries.
Taking an average Oklahoma refin
cry, with balanced skimming and
cracking operations, the Journal shows
that in 1881 revenue from a barrel of
crude oil of SO degrees gravity aver
ages 1884, while the expense was
Sl19 In 1928, with the pipe line and
operating costs the same. but the price
of crude SI.31 at the well instead of SO,
the overall return was $2468.
Retail Prices.
Retail prices at so scattered cities
on January /, 1882, averaged 1919 cents
a gallon The 1856 average of year
previously was an abnormal low. The
year-end prices for 1929 and 1928 were
1928 and 1882 respectively.
Only three States, Texas, New Mex
leo and Michigan, showed an increase
in total output of crude. and the Texas
expansion was due entirely to East
Texas and East Central Texas All
the myriad other Texas pools showed
decreases.