1. UNDERSTANDING TODAY’S CRUDE OIL AND PRODUCT MARKETS Rayola Dougher API Senior Economic Advisor, dougherr@api.org

2. Prices are determined by supply and demand factors on a worldwide basis. Crude oil and petroleum products are global commodities

3. Refiner Acquisition Price of Crude Oil Dollars per Gallon Source: EIA

4. Dollars per Gallon Source: EIA Changes in Gasoline Prices Mirror Changes in Crude Oil Prices

5. Relationship between Retail Gasoline, WTI and Brendt Crude Oil Prices Source: EIA

6. Oil Prices Relate to Many Uncertain Factors Source: EIA

7. Oil Price Growth Mirrors World GDP Growth Changes in the price of oil have closely tracked changes in the world’s gross domestic product growth. Source: Dallas Fed

8. Relationship between OPEC’s Spare Capacity and Oil Prices Reduced OPEC excess capacity helped tighten the oil market. In mid-2008 when oil prices reached record highs, OPEC excess capacity was down to 1 million barrels per day. Source: Dallas Fed

9. Trends in WTI Prices Mirror Trends in Commodities Without Futures Markets Prices for Illinois Basin coal, tallow and cobalt increased as fast as oil, if not faster, in 2008 and fell just as quickly when the economy crumbled. Source: Dallas Fed

10. What Consumers are Paying for at the Gasoline Pump Average of gasoline components for January – November, 2011 as reported by EIA

12. U.S. Gasoline Requirements

13. 2012 Dollars per Gallon Components of Annual Average Gasoline Prices Adjusted for Inflation Source: EIA

14. Components of Monthly Gasoline Prices Adjusted for Inflation Source: EIA 2012 Dollars per Gallon

15. Monthly Refiner Margins Adjusted for Inflation 2012 Dollars per Gallon Source: EIA

16. Components of Gasoline Prices in 2011 Dollars per Gallon Source: EIA

17. Refiner Margins in 2011 Cents per Gallon Source: EIA

18. Earnings Cents of net income per dollar of sales Source: Based on company fourth quarter 2011 financial reports.

19. Western States’ Gasoline Prices Source: AAA Fuel Gauge report Cents per Gallon

20. Components of Gasoline Prices on January 26, 2012 Source: AAA Fuel Gauge report, NYMEX WTI crude, API gasoline tax estimates

21. For more information visit www.api.org www.energytomorrow.org www.energycitizens.org Thank You