Slide 14 of 15

Notes:

• PADD 3 is a major source of supply for the East Coast. This graph shows how during the winter of 1997-1998 when distillate stocks were very high, production fell back. In contrast, we entered the winter of 1996-1997 with very low stocks, and refineries reached record production levels as they tried to build stocks late in the season.

• Notice that production is normally reduced in January as distillate stocks are used to meet demand and as refineries begin maintenance and turnovers, which continue into February.

• This January is no different. There is room for some production increases in January and February, if refineries postpone maintenance. But postponing maintenance and turnarounds can create problems when the gasoline production season begins in March and April.

• Still, we expect to see some elevation in production as a result of the price incentives.