1. Winter Distillate Outlook Joanne Shore Energy Information Administration PPMCSA Annual Meeting & Trade Show September 2000

2. Distillate Prices Increasing With Crude Oil

3. Factors Driving Prices & Forecast zCrude Oil Prices zDistillate Price Spread Affected by Supply/Demand Balance yDemand yProduction yNet Imports yInventories -- Measure of Balance zDistillate Forecast

4. First Factor Impacting Distillate Prices: Crude Oil Prices Forecast: Energy Information Administration September Short Term Energy Outlook

5. High Crude Prices Go With Low Inventories Forecast: Energy Information Administration September Short Term Energy Outlook

6. Second Price Component: Spread Impacted by Distillate Supply/Demand Balance

7. Distillate Stocks are Low – Especially on the East Coast Source: EIA

8. Distillate Stocks Are Important Part of East Coast Winter Supply Source: EIA

9. Winter Demand Impacted by Weather Source: National Oceanographic and Atmospheric Administration; Normals: EIA.

10. Warm Winters Held Heating Oil Demand Down While Diesel Grew Source: EIA

11. Distillate Demand Strong in December 1999 History: EIA; Projections: Short-Term Energy Outlook, September 2000

12. Dec 1999 & Jan 2000 Production Fell, But Rebounded with Price History: EIA; Projections: Short-Term Energy Outlook, September 2000

13. Higher Yields Can Be Achieved History: EIA; Projections: Short-Term Energy Outlook, September 2000

14. Unusual Net Imports May Only Be Available at a High Price History: EIA; Projections: Short-Term Energy Outlook, September 2000

15. Distillate Stocks Expected to Remain Low History: EIA; Projections: Short-Term Energy Outlook, September 2000

16. Distillate and Crude Oil Price Forecasts Source: Spot Prices, S&P DRI Platt's; Retail, EIA

17. Consumer Winter Heating Oil Costs Average Northeast Household Heating with Oil 97-98 Actual 98-99 Actual 99-00 Actual 00-01 Forecast Gallons636647643683 $/Gal$0.93$0.80$1.19$1.32 Cost ($)$591$518$765$901 Forecast: Energy Information Administration September Short Term Energy Outlook

18. Conclusion zDistillate stocks likely to be low going into winter – increases odds for volatility zPrices expected to average 12-15 cents per gallon higher than last winter even without volatility zConsumers will need to purchase more fuel this winter if weather is normal zHigher prices times higher volumes equals higher bills this winter than last