2.  OPEC – a cartel of countries that join together to make decisions regarding the supply of oil in the world market  GDP – the dollar market value of all the goods and services produced in a given economy in a given time period (a barometer of a country’s economic health)  Value of the dollar – the international value of the U.S. currency  Oil is refined and processed into gasoline.  The gasoline market has demand and supply

3.  Production  Weather  Wars  Politics  Exploration

4.  OPEC, supplier of more than 40 percent of the world’s oil, lowered its forecast for 2009 oil demand to 87.66 million barrels a day due to the global economic slowdown.  The OPEC governor said that OPEC needs to study the effects of its production cuts before considering an emergency meeting by at least reviewing the data from September and October.  OPEC agreed to a limit for 11 members of 28.8 million barrels a day, 500,000 barrels lower than their July output. They meet again on Dec. 17.

6.  1 Saudi Arabia :9,475,000 Saudi Arabia  2 Russia :9,400,000 Russia  3 United States :7,610,000 United States  4 Iran :3,979,000 Iran  5 China :3,631,000 China  6 Mexico :3,420,000 Mexico  7 Norway :3,220,000 Norway  8 Canada :3,135,000 Canada  9 Venezuela :3,081,000 Venezuela  10 United Arab Emirates :2,540,000 United Arab Emirates  11 Nigeria :2,451,000 Nigeria  12 Kuwait :2,418,000 Kuwait  13 Iraq :2,130,000 Iraq  14 United Kingdom :2,075,000 United Kingdom  15 Libya :1,720,000 Libya  16 Angola :1,600,000 Angola  17 Brazil :1,590,000 bbl/day Brazil

7. Total U.S. marketed natural gas production is expected to increase by 7.8 percent in 2008 and by 3.8 percent in 2009. Strong year- over-year production growth has been led by the development of onshore fields, particularly in Texas and Wyoming, where production increased by 16 and 12 percent, respectively, during the first 6 months of 2008 relative to year-ago levels.

8.  How much oil does the U.S. consume each day?  20.7 million barrels  How much oil does the U.S. produce each day?  7.6 million barrels  How much oil does the U.S. import each day?  9.7 million barrels  How much does the U.S. import each day in other petroleum products?  3.4 million barrels  Petroleum products include unfinished oils, liquefied petroleum gases, pentanes plus, aviation gasoline, motor gasoline, etc.

9.  Country YTD 2008 YTD 2007  CANADA 2,459 2,458  SAUDI ARABIA 1,558 1,435  VENEZUELA 1,196 1,363  MEXICO 1,302 1,593  NIGERIA 1,052 1,054  IRAQ 677 473  ANGOLA 527 554  RUSSIA 486 419  ALGERIA 524 722  VIRGIN ISLANDS 329 327  BRAZIL 250 204

11.  Alternative fuels  Worldwide Economic Growth  China  Conservation  Income  Changing taste and preference

12. Total U.S. petroleum and other liquids consumption is projected to decline by 610,000 bbl/d, or about 3 percent, in 2008

14.  World 80,290,000 World  United States 20,800,000 United States  European Union 14,550,000 European Union  China 6,930,000 China  Japan 5,353,000 Japan  Russia 2,916,000 Russia  Germany 2,618,000 Germany  India 2,438,000 India  Canada 2,290,000 Canada  Korea, South 2,130,000 Korea, South

15. Total natural gas consumption is expected to increase by 2.7 percent in 2008 and by 2.2 percent in 2009

16.  Price Quantity supplied (QS)  $2.30 300 million gallons per day  $2.90 340  $3.20 380  $3.50 400  $4.10 500  Price Quantity demanded by all U.S. consumers of gasoline (QD)  $4.70 300 million gallons per day  $4.10 350  $3.50 400  $2.90 425  $2.30 470

21.  Is the market efficient?  Price gouging – pricing above the market price when no alternative retailer is available

22. YearJanFebMarAprMayJunJulAugSepOctNovDec 1998 1.1311.0821.0411.0521.0921.0941.0791.0521.0331.0421.0280.986 1999 0.9720.9550.9911.1771.1781.1481.1891.2551.281.2741.2641.298 2000 1.3011.3691.5411.5061.4981.6171.5931.511.5821.5591.5551.489 2001 1.4721.4841.4471.5641.7291.641.4821.4271.5311.3621.2631.131 2002 1.1391.131.2411.4071.4211.4041.4121.4231.4221.4491.4481.394 2003 1.4731.6411.7481.6591.5421.5141.5241.6281.7281.6031.5351.494 2004 1.5921.6721.7661.8332.0092.0411.9391.8981.8912.0292.011.882 2005 1.8231.9182.0652.2832.2162.1762.3162.5062.9272.7852.3432.186 2006 2.3152.312.4012.7572.9472.9172.9992.9852.5892.2722.2412.334 2007 2.2742.2852.5922.863.133.0522.9612.7822.7892.7933.0693.02 2008 3.0473.0333.2583.4413.7644.0654.093.786