Oil price

“ Americans are concerned about the high price of gasoline. Everyone who commutes to work, purchases food, ships a product, or takes a family vacation feels the burden of higher prices at the pump. And families across our country are looking to Washington for a response.
The fundamental problem behind high gas prices is that the supply of oil has not kept up with the rising demand across the world. One obvious solution is for America to increase our domestic oil production. So my Administration has repeatedly called on Congress to open access to new oil exploration here in the United States. ”

“ I do not believe there is any intention among the oil men to 'bull' the market: The endeavour is to equalise all around and protect the capital invested. If by common consent, in good faith, the refiners agree to reduce the quantities to an allotment for each, made in view of the supply and demand, and the capacity for production, the market can be regulated with a reasonable profit for all. The price of oil to-day is fifteen cents per gallon. The proposed allotment of business would probably advance the price to twenty cents. ”

“ But over the last few years, limited supplies and an unprecedented growth in demand have sent the global oil market itself teetering towards the edge of disaster. With our own Energy Department telling us that U.S. demand for oil will jump 40% over the next twenty years and countries like China and India adding millions of cars to their roads, the price of oil is reaching levels we just can't handle anymore. ”

“ An organisation to protect the oil capital is imperatively needed. Oil to yield a fair profit should be sold for twenty-five cents per gallon. That price would protect every interest and cover every outlay for getting out the crude petroleum, transporting by railroad, refining and the incidental charges of handling, etc. The foreign markets will regulate the price to a great extent, because they are the greatest consumers. The people of China, Germany, and other foreign countries cannot afford to pay high prices. ”

“ These and many other questions are pertinent, for clearly if they can control the shipment they can control the price of oil, and if they can control the price to the extent of twenty-five cents per barrel, they can control it entirely. If they can control it entirely, where will be their limit? Who will dictate a line of policy to them? And may not one of the greatest and most important industries of this country be destroyed and hundreds of thousands of business men be made bankrupt if this combination is successful and has the disposition to work ruin? ”

“ How low will they force the price of crude?
How high refined?
Will they adopt a liberal policy for producers, or will they destroy their interests and crush out the oil production entirely ? Will they be liberal with dealers and consumers and adopt uniform rules with steady prices, or will they take advantage of times and circumstances and force ruinous corners upon the trade? ”

“ A. Certainly; an individual or a combination of men can advance the price or more or less depress the price of any commodity.
Q. But if you desire to increase—to put up the price of the refined oil, or to put down the price of the crude oil, is it within your power to do it, in the way I have indicated, by staying out of the market or going into the market to purchase, controlling 75 per cent, of the demand for the crude oil? ”

“ Every oil producer and every oil seller knows without any argument what he is up against that the Standard Oil Company can sell oil in as large quantities, as well refined, and at as low a price as he can afford and if need be a little lower. ”

“ The Standard Oil Company never lowered the price of its oil except when compelled to do so by competition. The largely increased output of crude oil, the improved methods of refining, the greatly lowered cost of transportation would have lowered the price of coal oil without the philanthropy of the Standard Oil Company. ”

“ A glance at the chart is enough to show that the home market has suffered more violent, if less frequent, fluctuations than the export market. A suggestive observation for the consumer is the effect of a rise in crude on the price of domestic oil. The refined line usually rises two or three points to every one of the crude line. It is interesting to note, too, how frequently high domestic prices are made to offset low export prices; thus, in 1889, when the Standard was holding export oil low to fight competition in Europe, it kept up domestic oil. ”

“ Indeed, any consecutive study of the Standard Oil Company's use of its power over the price of either export or domestic oil must lead to the conclusion that it has always been used to the fullest extent possible without jeopardising it; that we have always paid more for our refined oil than we would have done if there had been free competition. ”

“ New worldwide crude oil production is now and is likely to continue to be at least two million barrels a day less than consumption through the first quarter of 1981. This shortage has resulted in increased petroleum prices, and the combined effects of the shortage and present and future price increases resulting from it may have a major adverse impact on the national economy. ”

“ If you will take the trouble to appoint a committee of producers to investigate, we will show that the contracts with the railroads are as favourable to the producing as to any other interests; that the much-denounced rebate will enhance the price of oil at the wells, and that our entire plan in operation and effect will promote every legitimate American interest in the oil trade.
You patiently test a well before deciding upon its merits, like rational men. ”

“ As a natural result of these extraordinary powers, we see, as in the case of the Standard Oil Company, the price of a necessity of life within the control of a group of nine men, as able, as energetic, and as ruthless in business operations as any nine men the world has ever seen combined. They have exercised their power over prices with almost preternatural skill. It has been their most cruel weapon in stifling competition, a sure means of reaping usurious dividends, and, at the same time, a most persuasive argument in hoodwinking the public. ”

“ What would you do right now to reduce the price of gasoline?
DODD: Well, what we've offered already, in fact, and that is, of course, we ought to be saying here that when the price of a barrel of oil gets beyond $40 a barrel, where there's plenty of profit here, that those dollars ought to be returned to the consumers in a rebate or plowed back into the research that would allow us to develop alternative technologies.
But the real way to get away from this here, our dependency on that kind of fuel is causing us serious problems across the board. ”

“ Our dependence on foreign oil is like a foreign tax on the American Dream, and that tax is growing every year. My administration is doing all we can to help ease the problem in the short run. We're encouraging oil-producing countries to maximize their production so that more crude oil is on the market, which will help take the pressure off price. We'll make sure that consumers here at home are treated fairly, there's not going to be any price-gouging here in America. But to solve the problem in the long run, we must address the root causes of high gasoline prices. ”

“ Freights and handling considered, there is, it is evident, nothing like a settled price or profit for illuminating oil in the United States. Now, there is no one who will not admit that it is for the good of the consumer that the normal market price of any commodity should be such as will give a fair and even profit all over the country. That is, that freights and expense of handling being considered, oil should sell at the same profit in Texas as in Ohio. That such must be the case where there is free and general competition is evident. ”

“ It is estimated that the world’s consumption of illuminating oil amounts to 1,800,000 gallons every day. At the present price of oil as sold retail, and taking an ordinary circular-wick burner of forty candle power, it costs about three-sixteenths of a penny per hour, which was fifty per cent. cheaper than gas. ”

“ A typical oil farm of the early days
marketing trick, they get a fancy price. The Standard Oil Company has a great number of fancy brands of both illuminating and lubricating oils, for which they get large prices—although often the oil itself comes from the same barrels as the ordinary grade. Now it is from the extra price obtained from naphtha, water-white, fancy brands, and by-products that the independent refiner makes up for his loss on export oil, and the Standard Oil Trust raises its dividends to forty-eight per cent. ”

“ Here is over a cent saved on a gallon, and a cent saved, where millions of gallons are in question, makes not only great profits, but keeps down competition. The refiner who to-day must pay the Standard rates for transportation cannot compete in export oil with them. In January of 1904, when the chart shows the margin to have been about four and three-quarter cents, an independent refiner in the state of Ohio, dependent on the Standard for oil, gave the writer a detailed statement of costs and selling prices of products in his refinery. ”

“ For instance, why should oil be sold to a dealer at nearly four cents more on an average in Kansas than in Kentucky, when the freight from Whiting to Kansas is only a cent more? For no reason except that in Kentucky there has been persistent competition for twenty-five years, and in Kansas none has ever secured a solid foothold. Why should Colorado pay an average of 16.90 cents for oil per gallon and California 14.60 cents, when the freight from Whiting differs but one-tenth of one cent? ”

“ The price of light advanced. When the negotiations were in progress the producers were told that if the flow of oil glutting the market could be stopped the price of refined could be advanced, and that for every eighth of a cent a gallon advance in it the producers could expect an advance of 4 cents a barrel on their crude oil. Refined advanced during the shut-down to a price to correspond to which the crude should have risen to 96 cents a barrel. Instead, its price fell to 78 cents. The committee went to New York "to protest." ”

“ Second, the Commission concluded that price could usefully serve as an incentive to exploration and production only if it were computed according to the method by which gas is produced. Natural gas produced jointly with oil is necessarily a relatively unimportant by-product. The value of oil-well gas is on average only one-seventeenth that of the oil with which it is produced. ”

“ The advantages of capable, courageous, intelligent concentration of the varied branches of a great industry were never manifested more strongly. Deprived of the invincible bulwark the Standard offered, the oil-producers of Pennsylvania, New York, West Virginia, Ohio and Indiana would have been utterly helpless. The Muscovite bear would have gobbled the trade of Europe and Asia, driving American oil from the foreign markets. Local consumption would not have exhausted two-thirds of the production, stocks of crude would have piled up and the price would have fallen proportionately. ”

“ As a result of the Standard's power over prices, not only does the consumer pay more for oil where competition has not reached or has been killed, but this power is used steadily and with consummate skill to make it hard for men to compete in any branch of the oil business. ”

“ It could not, therefore, compete in price with the Pennsylvanian oil, which, when tapped, springs out of the ground of itself, to a height sometimes of many feet, under the pressure of the superincumbent rocks, yielding enormous profits, and turning needy adventurers into millionaires, though full half of the oil is sometimes wasted for the want of means to secure it. ”

“ The most curious feature perhaps of this question of the Standard Oil Company and the price of oil is that there are still people who believe that the Standard has made oil cheap! Men look at this chart and recall that back in the late sixties and seventies they paid fifty and sixty cents a gallon for oil, which now they pay twelve and fifteen cents for. ”

“ Where the Standard has the advantage is in its ownership of oil transportation. A common carrier gathering and transporting in 1902 all but perhaps 10,000 barrels of the 150,000 barrels' daily production of Eastern oil, the service for which the outsider pays sixty cents, costs it from ten to twelve cents at the most liberal estimate. ”

“ The low price for crude which these vast stocks caused, the high charges for gathering, transporting and storing, all services out of which the Standard was making big profits, the fact that the profit on refined oil steadily increased in these years—the result of the overthrow of independent refiners and pipe-lines—while the profit on crude steadily diminished, were facts which the oil producers brooded over incessantly, and the more bitterly because they felt they could do nothing to help themselves. ”

“ Is it also to be expected that, desiring to curtail the production of refined petroleum in this country, the railroads will not offer any additional facilities for exportation of the crude article."
A writer in the Oil City Derrick, quoted in the Cleveland Herald, March 2, 1872, said: "The ring pretend that they will make their margin out of the consumers. That is, that they will put refined up to a figure that will enable them to pay well for crude. . . . The consumers are the avowed victims, since they must pay a price which will warrant the ring in going on with their operations. ”