1. Petroleum Supply and Market Outlook Briefing for the 7 th Annual International Airport Operations/Jet Fuel Conference Orlando, Florida Mike Burdette Petroleum Division, Energy Information Administration February 3, 2005

2. EIA’s Petroleum Supply and Market Outlook Crude oil price outlook Global supply/demand fundamentals Global and U.S. inventories U.S. refinery capacity and utilization U.S. jet fuel outlook –Supply –Demand –Prices

3. WTI Crude Oil Price: Potential for Volatility Around Base Case Sources: History: EIA; Projections: Short-Term Energy Outlook, January 2005.

4. Weighing the MarketBulls Continued strong economic and oil demand growth Little spare capacity available Relatively low inventories Possible supply disruptions, including Iraq, Russia, Venezuela, Saudi Arabia, and Nigeria Bears Slowing economic and oil demand growth More supply Inventory recovery More capacity growth Milder winter weather Easing supply risks

5. Low Excess Capacity and Low Days of Supply Are Fundamentals Supporting High Crude Prices Sources: WTI: Reuters; OECD Days Supply: International Energy Agency; World Excess Production Capacity: U.S. Energy Information Administration estimates.

6. OPEC Spare Capacity Is Extremely Tight Right Now Current Excess Capacity Saudi Arabia1.0 – 1.5 Other Persian Gulf0 Other OPEC0 Source: U.S. Energy Information Administration estimates.

7. Annual World Oil Demand Growth Was Unexpectedly Strong in 2004 Forecast History Source: EIA, Short-Term Energy Outlook, January 2005.

8. OECD Commercial Oil Inventories (Using 5-Year Average and +/- 1 STD) Source: History – IEA; Forecast – EIA Short-Term Energy Outlook, January 2005.

9. U.S. Crude Inventories Projected to Remain in Normal Range Sources: EIA, Short-Term Energy Outlook, January 2005. History Million Barrels

10. U.S. Gasoline, Distillate and Jet Fuel Inventories Sources: History: EIA; Projections: Short-Term Energy Outlook, January 2005.

11. Capacity Surplus Disappearing, Creating Short-Term Challenge Gross Inputs Operable Capacity Source: U.S. Energy Information Administration. Forecast

12. U.S. Jet Fuel Supply and Demand Sources: History: EIA; Projections: Short-Term Energy Outlook, January 2005.

13. U.S. Jet Fuel Inventories Sources: History: EIA; Projections: Short-Term Energy Outlook, January 2005.

14. Jet Fuel Supply/Demand Balance Reflected in Spreads Spot Jet Fuel Price WTI Price Spot Heating Oil Price

15. Crude Oil, Jet Fuel and Gasoline Prices Sources: EIA Short-Term Energy Outlook, January 2005. Refiner Jet Fuel Sales to End Users Retail Regular Gasoline Crude Oil (WTI)

16. Petroleum Supply and Market Outlook Conclusion EIA expects global crude oil prices to decline modestly this year and next, but remain over $40 per barrel (WTI) Growth in global oil demand has outstripped that in supply in recent years, decreasing spare production capacity Capacity expansion will begin to catch up, re-establishing spare capacity Global and U.S. oil inventories will return to/remain near average levels through next year Jet fuel supply will be adequate, as refineries push out gasoline and distillate Jet fuel prices should remain relatively stable, near current (high) levels

17. Petroleum Supply and Market Outlook Briefing for the 7 th Annual International Airport Operations/Jet Fuel Conference Orlando, Florida Mike Burdette Petroleum Division, Energy Information Administration February 3, 2005