Oil Up

"For the first time in 17 or 18 months, crude-oil stocks above ground are pretty much what they ought to be." So last week said Ernest O. Thompson, senior member of the Texas Railroad Commission, which controls 45% of U.S. output. Texas oilmen freely predicted that their monthly production schedules, limited in July to nine days, will soon be raised to ten or twelve days.

Oil supplies were tighter and demand stronger than at any time since the post-Suez glut. By cutting production, imports and refinery runs in the first half of 1958, oilmen had whittled gasoline and crude-oil inventories to what they consider ideal levels. Last week stocks of gasoline slid to 183 million bbl.--a six-week supply--and crude dropped to 252 million bbl.--a five-week supply. More important, the boom in vacation driving boosted gasoline demand in June 4% above April and May, one of the best gains in twelve months.

While producers in some other industries were shaving prices (see below), oilmen last week felt confident enough to raise bulk gasoline prices on the Gulf Coast by 1/2-c- per gal. More increases are coming. Said a Sinclair Oil spokesman: "As the year goes on, higher refined prices will be inevitable because prices now are totally unrealistic in relation to costs."

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