Economics

INCREASING domestic demand for products, a sharp reduction in exports to Europe, and a rise in imports from South America were the chief features of the economic side of the industry in 1940. As the war progressed it became evident that exports to former European customers were being cut off or drastically reduced, leaving heavy inventories of products in the hands of many American refiners who had anticipated larger demands from the belligerents. Stocks of motor fuel reached burden-some proportions early in the year for the added reason that refining operations were stimulated by heavy demand for heating oils. Excessive tanker rates for Gulf to Eastern Seaboard movements during the first part of 1940 contributed to the accumulation of products on the Gulf Coast, where refinery gasoline prices were forced to extremely low levels by midyear. Tanker rates receded to normal during the summer but have since risen again to the approximate equivalent of pipe-line tariffs from the Mid-Continent.