Refining - Review of Refinery Engineering for 1947

Crude oil stocks were some 10,000,000 bbl higher on June I, 1947, than at any time during 1946 but the extremely heavy refinery runs the last half of 1947 cut crude inventories to approximately the 1946 closing level of 225,000,000 bbl. Many refiners were seriously short of crude oil during the year. This shortage was reflected in numerous advances in the posted price of crude, justified in part as an incentive for more production but more generally due to competitive bidding. Some purchasers of crude, endeavoring to keep their plants running, resorted to the payment, either directly or indirectly, of premiums above the posted price. Another common practice employed by some suppliers of crude oil was to demand refined products in exchange or trade for their raw material. The refined products picture has darkened in spite of record throughputs. Stocks of gasoline and light and heavy fuel oils were uncomfortably low at the beginning of the year and were in general still lower at the close. The rationing of some products, principally gasoline, to dealers and stations? initiated during the year, gained momentum as stocks continued to diminish. The emphasis placed by the manufacturers of oil-burning equipment on the convenience and economy of heating with oil, together with the tight situation in coal, has developed a tremendous demand for burning oils. Consumption of liquefied petroleum gas for domestic and household fuel had more than doubled in 1946 over 1943, and the demand seems to be limited only by the ability of the equipment builders to furnish necessary storage. transportation, and burning equipment. The supply situation is likely to become more acute in 1948. Demand for petroleum products is being pushed to new heights not only by the unprecedented domestic market but by a sudden and drastic upswing in estimates of military and governmental requirements. Additionally, oil exports are running far below the volume requested, amounting to less than forty percent in a recent quarter, and export licenses are reportedly being approved on the basis of urgent need *only. AX recent White House release sees little likelihood that estimated requirements of the sixteen nations participating in the proposed Marshall Plan can be met in full over its projected life—1948 to 1951. Present demand dictates maintenance of refinery operations at the highest possible level and the Bureau of Mines has forecast daily average crude runs in 1948 of 5,265,000 bbl. The Economics Advisory Committee of the Interstate Oil Compact Commission recently estimated the 1948 demand for petroleum products at nearly 6 pct above 1947. They further estimate daily average crude runs of 5,375,000 bbl in 1948, some 2 pct higher than forecast by the Bureau of Mines. Projected demand exceeds supply to the extent that Capitol Hill is reportedly investigating ways of enabling oil companies to act in concert without danger of antitrust prosecution, such as elimination of crosshauls, pooling of products, and lowering of octane.