Consumers may rejoice about the oil glut, but oil people don't.
To find out what effect the surplus is having on the oil barons, listen to a gaffe made by Clifton C. Garvin Jr., chairman of Exxon Corporation, while addressing securities analysts in New York this week: ''The world is suffering through, ah, consumers are benefiting from the oversupply of oil. . . .''
What Mr. Garvin meant was that oil companies are being hit by lagging demand and an oversupply of oil, cutting into their profit margins. With demand down, refineries are running at low levels. At the same time, inventories have remained relatively high as the oil companies have continued to honor their contracts to buy crude oil from OPEC countries. As a measure of that oil glut's impact on Exxon, the world's largest oil company, Garvin told securities analysts:
* In the United States, Exxon has closed several of its smaller East Coast refineries and has shut down a refinery in Cologne, West Germany. The company also sold its interest in an Italian refinery and is discussing the sale of its Irish and Greek refineries.
Exxon's 19 European refineries are operating at 60 percent of capacity. R.G. Reid, president of Esso Europe Inc., says there is still a need to ''retire at least 5-6 million barrels per day of refining capacity.'' In the Caribbean, refineries are operating at 50 percent of capacity, prompting Archie Monroe, president of Esso Inter-America, to note that some of the refineries are ''vulnerable.'' In the US, Exxon's five major refineries are operating at 66 percent of capacity. And, according to Randall Meyer, president of Exxon Company , U.S.A., there is a need for more refinery closings by other oil companies in the US.
At the same time, Exxon is spending several billion dollars to allow its current refineries to convert heavier -- and cheaper -- crude oils to lighter products. Demand for products from the lighter crudes has remained relatively strong.
* The company will scale down or eliminate some of its alternative energy projects. The $3 billion to $4 billion plan to build a lignite gasification plant in east Texas will be deferred, and the Rundle shale oil project in Australia will be reassessed over a three-to five-year period. But Exxon will continue to press ahead with its $2 billion Colony shale oil project in Colorado.
* Exxon executives are estimating that crude oil prices this year will drop further. Although they declined to give any firm estimates, Garvin noted that the spot price of oil was less than the Saudi Arabian posted contract price. Thus, Exxon's strategy, Garvin hinted, was to find those OPEC countries with high populations and consequently the need to sell oil and to bargain hard with them. He also noted that Iran's attempt to sell oil by reducing the price still appeared unsuccessful. Iran is dropping the price, he indicated, because it is broke.
* Because of the uncertainties surrounding the future direction of the economy and the demand for oil products, Garvin says it will be extremely difficult to forecast Exxon's earnings. Howard C. Kauffmann, Exxon's president, says the company is expecting the economy to begin to turn up later in the year, but he adds, ''It's too little and too late to result in annual growth for 1982 .'' Mr. Kauffmann said Exxon still hadn't ascertained how much of the drop in oil demand was the result of further energy conservation or fuel switching, and how much was related to the dip in the economy. Garvin said Exxon continued to have difficulties estimating US demand. ''We keep 'downsizing' our estimates every week,'' he said.
* The Exxon executive's inability to come up with precise numbers bothered some of the analysts. One analyst with a major retail brokerage house complained: ''I don't think these guys know what's going on. I put a lot of pressure on Garvin at lunch, and he didn't tell me anything.'' Still another, Sanford Margoshes of Bache Halsey Stuart Shields Inc., said he got some useful insights into the company even if there was a ''paucity of information to shape earnings estimates.'' Among Mr. Margoshes' insights was the fact that Exxon had ''improved success at replenishing its crude supplies.'' On the natural gas side , however, it would continue to show declining production until the Alaskan gas comes on stream.
* After Exxon's formal presentation to the analysts, the group of analysts and executives adjourned to a more informal session with hors d'oeuvres. In the less formal atmosphere, lips began to loosen. One analyst, Noel Casey, a vice-pesident at the Prudential Insurance Company, pressed Kauffmann to say what was going on inside Saudi Arabia. Kauffmann, however, demurred, saying, ''We don't have any special insight into what's going on inside Saudi Arabia.''
But he did admit that last month some of the partners in the Arabian American Oil Company took less than their crude allocations from Saudi Arabia. Exxon was offered some of this oil. He also noted separately that Exxon was being offered Saudi Arabian crude at well below the posted price. And, he blurted out, ''Makes you wonder where this crude is coming from.'' He noted that although he didn't know what the Saudi agenda for controlling prices and production was, he didn't doubt that there was one. During the course of the formal meeting, Garvin stated there was more at stake in Saudi Arabia than the price of oil, a hint some analysts surmised meant there are a lot of political overtones to the Saudi moves.