The Mid-Continent Petroleum Situation

WHEN the Cushing field flooded the oil market in 1914 and 1915 with a daily output equal to nearly one-third of the world's production, the situation was soon corrected by increased consumption, and the price of crude oil rose from 45 c. per barrel in, February 1915 to $1.10 in December of the same year-the highest price paid in the Mid-Continent field up to that time. The intensive search for oil during the following seven years failed to disclose a single new ,field equal to Cushing, and many observers concluded that the rapidly increasing number of wells contributing to the world's output, each declining roughly 20 per cent. a year, combined with the rapidly increasing con¬sumption of petroleum, made it highly improbable that any field would; be found again sufficiently large to seri¬ously affect the oil market. That seven exceptional fields should then be discovered simultaneously is a remarkable coincidence. Long Beach, Santa Fe Springs, and Powell, each exceeded Cushing in daily output and reached the apex of their production during a year when Burbank, Tonkawa, - Smackover and Huntington Beach each contributed several times the daily output of the average new pool. This unexpected and tremendous flood of flush production could only have the effect of depressing price and greatly adding to stocks throughout the country. It was particularly depressing in the Mid-Continent as the new oil from California proved of attractive refining grade and because of cheap transportation by water easily undersold Oklahoma crude in the eastern markets.