2. Crude Oil, Heating Oil, and Propane Market Outlook Briefing for the State Heating Oil and Propane Program Conference Kennebunkport, ME by Douglas MacIntyre Petroleum Division, Energy Information Administration August 12, 2002

3. WTI Crude Oil Price: Potential for Volatility Around Base Case Sources: History: EIA; Projections: Short-Term Energy Outlook, August 2002.

4. Annual World Oil Demand Growth 1991-2002 Sources: History: EIA; Projections: Short-Term Energy Outlook, August 2002.

5. Quarterly World Oil Demand Growth From Previous Year Sources: History: EIA; Projections: Short-Term Energy Outlook, August 2002. 2000 200120022003

6. U.S. Petroleum Demand in 2 nd Half of 2002 Expected to be Higher than in 2001 Sources: History: EIA; Projections: Short-Term Energy Outlook, August 2002.

7. Will OPEC Continue to Keep Production Low? History Projections Sources: History: EIA; Projections: Short-Term Energy Outlook, August 2002.

8. Will OPEC Continue to Keep Production Low? History Projections Sources: History: EIA; Projections: Short-Term Energy Outlook, August 2002.

9. Crude Oil Outlook Conclusions U.S. and global oil demand is recovering OPEC crude oil production could make for a tight crude oil situation this winter WTI prices could be close to $30 per barrel this winter; perhaps higher if OPEC doesn’t increase production after September meeting

10. Distillate Prices Generally Follow Crude Oil Spot West Texas Intermediate East Coast Retail On-Highway Diesel Fuel East Coast Residential Heating Oil

11. Distillate Stocks on the East Coast Built Through December Last Winter Source: Energy Information Administration Normal Range 2000-01 1999-00 1998-99 2001-02

12. Distillate Demand Forecast Last Year Right On Target Assuming Normal Weather Sources: History: EIA; Projections: Short-Term Energy Outlook, August 2001.

13. Heating Degree Days Deviation from Normal Since '95-'96 Winter Sources: History: EIA; Projections: Short-Term Energy Outlook, August 2002.

14. Distillate Demand Should Be Higher This Winter If Weather Is Normal Sources: History: EIA; Projections: Short-Term Energy Outlook, August 2002.

15. Distillate Fuel and Residual Fuel Demand vs. Spot Natural Gas Wellhead Price Sources: History: EIA; Projections: Short-Term Energy Outlook, August 2002.

16. Less Supply Likely This Fall Due to Increase in Jet Fuel Production Sources: History: EIA; Projections: Short-Term Energy Outlook, August 2002. Forecast

17. Distillate Fuel Oil Imports Weren’t Needed This Past Winter! Sources: History: EIA; Projections: Short-Term Energy Outlook, August 2002.

18. Distillate Supply/Demand Balance Reflected in Spreads Spot Heating Oil Price WTI Price

19. Distillate Stocks Expected to Remain Low Sources: History: EIA; Projections: Short-Term Energy Outlook, August 2002. Actual Forecast

20. Winter Crude Oil and Distillate Price Outlook Sources: History: EIA; Projections: Short-Term Energy Outlook, August 2002. Residential Heating Oil Wholesale Distillate Crude Oil (WTI)

21. Heating Oil Outlook Conclusion Distillate stocks should be comfortable going into the winter Prices likely to average higher than last winter given current crude oil price forecast Residential customers will likely need more fuel this winter, especially if weather is normal Higher price times greater volumes equals higher bills this winter than the low ones from last year

22. Propane Prices Follow Crude Oil

23. U.S. Propane Production Source: Energy Information Administration Average 1997-2001 2000 2001 2002

24. Propane Production by Source Source: Energy Information Administration

25. U.S. Propane Imports Source: Energy Information Administration Average 1997-2001 2000 2001 2002

26. Propane Demand is Highly Seasonal, But Fresh Supply is Not Source: Energy Information Administration Stock Build Stock Draw

27. U.S. Propane Stocks Average Range Lower Operational Inventory = 18.5 Million Barrels Actual Forecast Source: Energy Information Administration

28. PAD District II Stocks (Midwest) Average Range Source: Energy Information Administration

29. Average Range Source: Energy Information Administration PAD District III Stocks (Gulf Coast)

30. Propane Outlook Conclusion Residential prices should remain stable this winter with possibility for lower prices than last year U.S. inventories more than ample prior to the heating season - but Midwest inventories are at low end of normal range Demand uncertain due to weather and economy. But, temporary supply shortages may still occur due to possible bottlenecks in delivery system

31. U.S. Propane Imports Source: Energy Information Administration

32. Propane Stock Build/Draw Source: Energy Information Administration July 31