The economics of petroleum . act that lubricating oils aremanufactured from only a portion of the crude petroleum run torefineries in this country, a notably close coincidence in the pricecurves of the two is to be observed, although the price of lubricantstends to be somewhat more stable than the price of crude till recent years, the supply of lubricants was derived almost RELATION OF OIL PRICES TO COMMODITY PRICES 249 exclusively from Eastern crudes, but a growing share is now beingmade from the Mid-Continent, Gulf Coast, and Cahfornia to Fig. 117 shows that
The economics of petroleum . act that lubricating oils aremanufactured from only a portion of the crude petroleum run torefineries in this country, a notably close coincidence in the pricecurves of the two is to be observed, although the price of lubricantstends to be somewhat more stable than the price of crude till recent years, the supply of lubricants was derived almost RELATION OF OIL PRICES TO COMMODITY PRICES 249 exclusively from Eastern crudes, but a growing share is now beingmade from the Mid-Continent, Gulf Coast, and Cahfornia to Fig. 117 shows that the price of lubricating oils helda fairly even course from the beginning of 1913 to early 1916, inthe face of strong price disturbances prevailing elsewhere in thepetroleum industiy. In April, 1916, there came a sharp rise in price-level, following the initial recovery of the crude market from theGushing depression and the growth of orders for future the remainder of 1916 and practically all of 1917, lubricants. 1913 1914 1915 1916 1917 1918 1919 1920 1921 Fig. 118.—Relative prices of crude petroleum, petroleum products, and allcommodities by months, 1913-1921, in percentages of the average figuresfor 1913. (Average prices in 1913 = 100.) remained stable, showing few of the fluctuations elsewhere takingplace. The beginning of 1918, however, saw an abrupt ascent toprices well above those of 1916-1917, with further advances in early1918 to twice the pre-war level, to be explained by a combination ofcircumstances—increases in the cost of high-grade crude, generaldomestic conditions of stress and high costs, transportation con-gestion, shortages in special grades, and the ever-increasing growthof demand. From then on to late 1919 there was little change inlevel. 250 PRICES OF PETROLEUM AND ITS PRODUCTS
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