Production - Petroleum Production, 1931 - Summary

The broad picture of world petroleum production at the present time is one of an excessive supply. In any consideration of corrective measures to be applied in the future, it will be necessary to include all the producing areas of the entire world. To illustrate, United States production during 1931 was 48 million barrels1 less than 1930, whereas world production exclusive of the United States increased, owing principally to increases in Russia, Rumania and Persia. Domestic Peoduction Let us first consider the domestic production situation. Due to the fact that United States production was maintained below current demand, about 40 million barrels of oil were withdrawn from storage during 1931. Consumption increased about 1.5 per cent over 1930, which is less than the recent annual rate of increase of 8 to 11 per cent. If the machinery to prevent waste in the petroleum industry operative for more than a year will continue during the coming year and drilling is held to the 1931 level, there will be a decided improvement in the domestic situation by the close of 1932. This will be due in large measure to the drastic reduction in exploratory work and drilling which has been in effect for more than a year. Looking ahead for two or more years, probably there will be a shortage of domestic production in relation to domestic demand, unless there are discovered several large pools comparable to Oklahoma City or East Texas. Were the United States isolated, our problems in so far as petroleum production is concerned might be considered well along the road to recovery. To maintain this perspective will require the cooperation of foreign producers in the future, or protection of United Statcs markets from foreign invasion. Let us review briefly the present situation in the United States. East Texas has been the most important factor during 1931. The large initial production of individual wells and the rapid rate of drilling