Review of Refinery Engineering
- Walter Miller (Member A. I. M. E)
- Document ID
- Society of Petroleum Engineers
- Transactions of the AIME
- Publication Date
- December 1948
- Document Type
- Journal Paper
- 332 - 336
- 1948. Original copyright American Institute of Mining, Metallurgical, and Petroleum Engineers, Inc. Copyright has expired.
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Published in Petroleum Transactions, AIME, Volume 174, 1948, pages332-336.
Crude oil stocks were some 10,000,000 bbl higher on June 1, 1947, than atany time during 1946 but the extremely heavy refinery runs the last half of1947 cut crude inventories to approximately the 1946 closing level of225,000,000 bbl.' Many refiners were seriously short of crude oil during theyear. This shortage was reflected in numerous advances in the posted price ofcrude, justified in part as an incentive for more production but more generallydue to competitive bidding. Some purchasers of crude, endeavoring to keep theirplants running, resorted to the payment, either directly or indirectly, ofpremiums above the posted price. Another common practice employed by somesuppliers of crude oil was to demand refined products in exchange or trade fortheir raw material. The refined products picture has darkened in spite ofrecord throughputs. Stocks of gasoline and light and heavy fuel oils wereuncomfortably low at the beginning of the year and were in general still lowerat the close. The rationing of some products, principally gasoline, to dealersand stations, initiated during the year, gained momentum as stocks continued todiminish. The emphasis placed by the manufacturers of oil-burning equipment onthe convenience and economy of heating with oil, together with the tightsituation in coal, has developed a tremendous demand for burning oils.Consumption of liquefied petroleum gas for domestic and household fuel had morethan doubled in 1946 over 1943, and the demand seems to be limited only by theability of the equipment builders to furnish necessary storage, transportation,and burning equipment.
The supply situation is likely to become more acute in 1948. Demand forpetroleum products is being pushed to new heights not only by the unprecedenteddomestic market but by a sudden and drastic upswing in estimates of militaryand governmental requirements. Additionally, oil exports are running far belowthe volume requested, amounting to less than forty percent in a recent quarter,and export licenses are reportedly being approved on the basis of urgent needonly. A recent White House release sees little likelihood that estimatedrequirements of the sixteen nations participating in the proposed Marshall Plancan be met in full over its projected life-1948 to 1951.
Present demand dictates maintenance of refinery operations at the highestpossible level and the Bureau of Mines has forecast daily average crude runs in1948 of 5,265,000 bbl. The Economics Advisory Committee of the Interstate OilCompact Commission recently estimated the 1948 demand for petroleum products atnearly 6 pct above 1947. They further estimate daily average crude runs of5,375,000 bbl in 1948, some 2 pct higher than forecast by the Bureau ofMines.
Projected demand exceeds supply to the extent that Capitol Hill is reportedlyinvestigating ways of enabling oil companies to act in concert without dangerof antitrust prosecution, such as elimination of crosshauls, pooling ofproducts, and lowering of octane.
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