1. History and Outlook for Gasoline Prices Energy Policy Forum to Discuss “Possible Solutions to High Gas Prices” Moderated by Congressman Jim Gerlach Doug MacIntyre/Michael Burdette Petroleum Division U.S. Energy Information Administration July 6, 2005 Owen J. Roberts High School, Pottstown, PA

2. Pennsylvania Gasoline Prices Closely Follow the U.S. Average U.S. and Pennsylvania Retail Regular Gasoline Prices Source: AAA Fuel Gauge Report

3. Long-term Gasoline Price Trend Turned Upward in 1999 Source: Energy Information Administration

4. Crude Oil is Largest Contributor to Gasoline Price Increase Since Last Year Components of Retail Gasoline Prices U.S. Average, June $1.969 per Gallon $2.156 per Gallon 44.0 30.9 39.5 82.5 44.3 14.7 39.1 117.5 June 2004June 2005 Source: Energy Information Administration

5. Source: Reuters How High Will Crude Oil Prices Rise Before Demand Growth Slows Substantially? $60?

6. World Oil Demand Growth Has World Oil Demand Growth Has Accelerated Source: History: EIA; Projections: Short-Term Energy Outlook, June 2005.

7. OPEC Spare Capacity Is Extremely Tight Right Now Current Excess Capacity Saudi Arabia0.9 – 1.4 Other Persian Gulf0.0 Other OPEC0.0 Source: Energy Information Administration estimates.

8. Global Inventories Are in Normal Range, But Forward Cover is Low Source: Energy Information Administration

9. OECD Inventories and Spare Production Capacity Explain Most of Recent Price Variation Source: Reuters Spot Prices, EIA modeling.

10. Crude Oil and Product Markets Move Together Crude Oil and U.S. Average Gasoline Prices Source: EIA Retail Prices, Reuters Spot Prices

11. Gasoline Supply/Demand Balance Reflected in Spreads Spot Gasoline Price WTI Price Source: Reuters

12. U.S. Gasoline Inventories Are High, But Demand Growth Puts Forward Cover Relatively Lower Source: Energy Information Administration.

13. Refining Capacity Surplus Disappearing, Creating Short-Term Challenge Gross Inputs Operable Capacity Forecast Sources: History: EIA; Projections: Short-Term Energy Outlook, June 2005.

14. Retail Gasoline Price Changes Lag Spot Prices U.S. Average Regular Gasoline Prices Sources: EIA Retail Prices, Reuters Spot Prices

15. Retail Gasoline Price Changes Can Be Predicted From Spot Prices U.S. Weekly Average Regular Gasoline Price Changes Source: EIA

16. Retail Gasoline Prices Are Still Much Lower Than Early 1980s When Adjusted for Inflation U.S. Monthly Average Regular Gasoline Retail Price Sources: EIA, Bureau of Labor Statistics

17. Crude Oil and Gasoline Prices Are Expected to Remain High for the Foreseeable Future Crude Oil and U.S. Average Gasoline Prices Sources: History: EIA; Projections: Short-Term Energy Outlook. Forecast