OIL OUTPUT.

Hauraki Plains Gazette, Volume XXXX, Issue 5395, 4 March 1929, Page 1

OIL OUTPUT.

SUGGESTION OF CURTAILMENT. MOVE BY CONTROLLING CONCERNS The end of the oil war between American and. Dutch interests, and—of more interest to the man in the car—a general rise in the market costs of petroleum products is seen by the “Dallas News” in the recent statement of Walter £. Teagje, president of the Standard o'l Company of New Jersey, that oil of America and Europe believe something should be done to curtail production of crude petroleum throughout the woirld. If the price of . gasoline has maintained! through domestic curtailm'ejnt in spite of foreign production, what will happen when the foreign output also is greatly curtailed!?” asks the Washington Post," a little apprehensively, and a writer in the “New York World” expects as. a result of the Teagle state-, mept, that the next move in the oil I world will be -“the concerted action I of the largest companies to curtail I production throughout the world for the purpose of estahlishipg prices.” According; to the Standard Oil executive, it was: agreed at a recent conference in Scotland between representatives of the Royal Dutch Shell, Standard Oil Company of. Indiana, Gulf Oil Corporation, the Anglo-Persian Oil Company, and his own concern that uneconomic, production of crude oil the world over was progressively injurious to the entire petroleum industry, and in the end would adversely affect thq consumer. They realised, however, admits Mr Teagle, that the curtailment of output would. require 1 the co-operation of the large and small producers everywhere, and that “specific undertakings »|i the of larger petroleum interests to correct, this situation are impracticable.” Nevertheless, says a New York. “Herald Tribune” articles: — “It is believed in the oil industry tiiat there will be a conference soon of American producers at which measures to restrict produgtipp.. will be adopted. Mr Teagle .would, not say, tjiat he intended toi take the lead in arranging siich a conference, but the opinion is that he will presept to such a conference assurances from foreign oil executives that their companies will co-operate in a pt** l gramme to restrict output not only in America but in. Venezuela and Mexico as well.”

Said Mr Teagle upon his return from Europe: “While our cohversar tions revealed a unanimity of, view that uneconomic, production of crude oil the world over was progressively injurious to the entii’e petroleum industry, and in the end would adverseil affect the consumer, it is manifest that specific undertakings on the part of larger petroleum interests to correct this situation are impracticable. “Any attempt at regulation of over-* production of cr;Ude pil would obviously require co-operation of a vastly greater number and diversity of interests thap were represented. The one result was a clear understandiing on the part pif us ajl of the desirability of action throughout thtj crude production industry to regulate its output to conform, more closely to requirements of the consuming, market. “Thisj of course, can only be accomplished by voluntary, but more or less concerted, action on the P& rt of large and small producers in all the important fields of the world, and by the postponement of opening new fields until the present period P-£ over-production is definitely past.” According to a writer in the New York World: “In the past most oil executives have heljl that the natural functioning of economic, law is the chief remedy for such a situation. Oven-production brings • low prices. Low prices discourage drilling operations. Reduced drilling restricts th© supply and puts the price up. High prices .then bring rejnewedi drilling—and the old cycle is complete.” The question that now occurs 1 to the Washington Post is whether or not gasoline pric,es at the present moment are fair, and .whether or not world curtailment is to bq under 0 taken in an attempt to maintain, what it considers; excessive prices. “The corollai*y to control of production,” believes the Baltimore Sun. “will be inci’ease in prices.” In the opinion of this paper thiq question is: “How c,an agreements to curtail production he permitted, and at the same time be so safeguarded as- to protect the public from exploitation ?"