Montana oil and mining journal. [volume] (Great Falls, Mont.) 1931-1953, 1934-07-28
MI. Operator: What Viii
You Haze PROBATION or
Cuts in Crude Prices?
An Editorial

From many operators and from others familiar with the
situation in northern Montana oil fields The Journal has
learned that the old army game is about to be placed back
in operation in northern Montana.
word of explanation how the old army game works
on the oil industry might not amss at this point
The story is about old the oil business The buyers
of crude oil raise the price ns and encourage develop
ment AS the boys wen their way to supply
the needs the buyers usually back away from the picture
leaving apparent oyersuppy of production hand which
the for dropping the price of crude oil When this
accomplished the buyers usually back into the market
to fill up immense storage during the winter months making
it up into gasoline the following Thus the small
independent producer suffers not only he but the state of
Montana the United States government and all landowners
who royalty in these development operations.
Many operators haze commented to rs that the Cana
dian buyers IN Ke0Tn-S1abtWSt backing GzUuy from
crude oil purchase contracts. Heretofore they
Ting for contracts N0 Nth 81 strings of tools zVorR-
ing they suddenly become cold They certainly think
that they going to be able to get cheaper oil and BY
the GzCs of the old army game they are right.
We appreciate that the Canadian buying companies
Interested in buying oil as cheapy as possible having no in
whatsoever in the resale of gasoline in the United
States and the facts that heretofore reductions in the
of crude oil have not been reflected in the price of gaso
sold in local market In fact insofar the producer
there appears to be relationship between the two
Commodities The Canadian buyers have indicated their de
ire from 5000 to 5000 barrels daily and have invited
he development of this barelage One has built
pipeline to pipe this oil directly into Canada which highly
to Montana producers providing they pay the
fontana producer fair price.
This big business racket of storing oil has been of
the profitable operations the oil business and the
facts that they usually pGy for their storage every
year by pushing prices up and DOM Perhaps Cut Bank
producers should pay for little tG'kGge and perhaps
they shouldn't
There was created last year Montana Oil Conservation
oard This board has devoted its efforts up to this time to
epng the Montana quota high enough to allow Montana
fields market sufficient oil to supply the domestic and
anadian market That allows big margin. Everyone is
,posed to proratng long operator sell his oil
profit However if he is going to have to sell his oil at
LOSS wouldn't be well to avert the possibility Of that
S.?
In other words doesn't take soohsayer to find out that d.
plan of some buyers is the price of north Montana
If nothing done about it. win be selling oil again
from cents to 10 barrel less than the lifting cost
NozU that zoe haze Conservation board, could 1t do
more IN conserving natural than yegm-
late the production Of OIL hat it ssH NOT be sold in
a foSsf y
Wouldn't il be better prorate production to actual de-
ind at this time TO make possible to sell at profit =
ALF as much oil as we are producing to sell -
- - ecsamnmsa rass wem8 on