1. Oil Prices: Cycle, Bubble, or Fundamental Shift C.E. Bishop Director, Economics Marathon Oil Corp.

2. Oil Market Perceptions Demand in the last decade has outpaced expectations as Asian economies grow Non-OPEC production has also failed to keep pace OPEC production and capacity has failed to meet expectations

3. Oil Prices and Open Interest in Crude Oil Futures and Options Source: Nymex

4. Reality Check World Oil Demand is near long run expectations Non OPEC production exceeded expectations OPEC Capacity increases have not been necessary

5. EIA World Oil Demand Forecasts million barrels per day Source: US Dept. of Energy, Energy Information Administration

6. China’s Increasing Share of World Oil Consumption Presents Logistical and Geopolitical Challenges

7. World Crude Oil Refinery Distillation thousand b/d

8. EIA World Oil Production Outlook million barrels per day Source: US Dept. of Energy, Energy Information Administration

9. Actual 2005 Production vs 1995 EIA Outlook Actual 2005 Production vs 1995 EIA Outlook million barrels per day

10. Oil reserves-to-production (R/P) ratios Source: British Petroleum plc

11. Persian Gulf Imports as a Percent of Total Oil Demand North America 12% Europe 19% Asia 46% U.S. Dept. of Energy, Energy Information Administration: International Energy Outlook 2004

12. Three Key Issues Access

13. Conclusions Consumers make the right decisions, whatever the price signals.Consumers make the right decisions, whatever the price signals. Access will determine the potential for Non-OPEC production, and the ultimate response to the current price level.Access will determine the potential for Non-OPEC production, and the ultimate response to the current price level. Prices will moderate if the industry is permitted to do what it does best: find, produce and deliver affordable energy.Prices will moderate if the industry is permitted to do what it does best: find, produce and deliver affordable energy.