The Squeeze

The new mandatory oil quotas on imports, set for major refiners last week, squeezed some companies tight. Of the 136 companies put on quotas, those seriously restricted in their imports are Gulf Oil Corp., whose crude and unfinished oil quota was lopped 31.7%, Sinclair Refining Co. (29.6%), Tidewater Oil Co. (38.8%), Standard Oil Co. of Indiana (32.8%), Socony Mobil Oil Co., Inc. (40.4%) and Texas Co. (33-8%).

The cuts brought a cry from Standard of Indiana that they are "grossly discriminatory." As other importers also stormed over the Administration's move, independent Texas oilmen (who produce more than 40% of the nation's crude output) put on contented smiles. U.S. domestic oil demand is now running at about 9,000,000 bbl. per day and is expected to increase this year to 9.4 million bbl. daily. With U.S. daily crude production about 7,000,000 bbl. and total imports cut to 1.5 million, it is domestic producers who will make up the 1,000.000-bbl. daily difference. To clear the way for price rises, when the present surplus is worked off, the Texas Railroad Commission last week decreed a tight hold on April production (3,065,472 bbl., down 107,214 bbl. from March).

Although the Administration argued that the cut in imports would help national defense--by increasing drilling and U.S. reserves--the oil industry's own figures last week showed that there need be no worry over reserves. The American Petroleum Institute reported that drilling had declined slightly last year. But a falloff in demand, plus imports, had slowed the drain on U.S. fields. Thus, U.S. crude reserves at the end of 1958 stood at an alltime high of 30,536,000,000 bbl., up 235 million from the total the year before.

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