Notes

Slide Show

Outline

1	Oil Markets After the Hurricanes: Reversion to the Mean or Return to Recent Trend?
2	WTI Crude Oil Price: 1998-2006
3	Weighing the Market
4	WTI Futures Curves: The Deferred Price Has Also Increased in Recent Years
5	World Oil Demand Growth Is Expected To Pick Up Again in 2006
6	Estimates of World Demand Growth Have Been Continually Too Pessimistic in Recent Years
7	Estimates of Non-OPEC Supply Growth Have Been Continually Too Optimistic in Recent Years
8	Recent Non-OPEC Supply Growth Is Mostly from Former Soviet Union (FSU) Countries
9	Hurricanes Katrina and Rita Shut In Significant Gulf Crude Oil Production
10	Hurricanes Katrina and Rita Shut In Significant Gulf Natural Gas Production
11	Will OPEC Keep Markets Adequately Supplied?
12	OECD Total Commercial Oil Stocks Near Average Levels This Year
13	But OECD Total Commercial Oil Stocks Low in Terms of Days Supply
14	Regionally, OECD Atlantic Basin Commercial Oil Stocks Are Low in Terms of Days Supply
15	And OECD Pacific Commercial Oil Stocks Are Very Low in Terms of Days Supply
16	OECD Total Commercial Petroleum Product Stocks Are Low in Absolute Levels
17	OECD Total Commercial Petroleum Product Stocks Are Particularly Low in Terms of Days Supply
18	As Spare Capacity Increases in 2006, OECD Days Supply Will Continue to Fall
19	U.S. Refining Capacity Surplus Disappearing, Creating Short-Term Challenge
20	Capacity Surplus Varies Seasonally
21	Seasonal Crude Use Down In Fall Worldwide
22	Hurricanes Katrina and Rita Initially Shut Down Most Gulf Refinery Capacity
23	Hurricane Outages Lowered Available Short-Term U.S. Refinery Capacity
24	Initially, Other Regions Help Balance U.S Losses
25	Product Imports Were Key Supply Source During September Through November
26	U.S. Four-Week Average Finished Gasoline Demand Begins to Show More Typical Growth
27	U.S. Four-Week Average Diesel Demand Has Returned to Pre-Hurricane Growth
28	Chinese Oil Demand Begins to Show Growth Again in Second Half of 2005
29	Much of China’s Oil Demand Growth in Last 2 Years Has Come From Gasoline and Diesel
30	OECD Atlantic Basin Commercial Gasoline Stocks Well Below Average in Terms of Days Supply
31	OECD Atlantic Basin Commercial Distillate Stocks Also Low in Terms of Days Supply
32	OECD Pacific Commercial Distillate Stocks Low in Terms of Days Supply
33	U.S. Diesel Inventories Have Been Low in Terms of Days Supply for the Last 2 Years
34	Conclusions U.S. oil demand, while temporarily affected by the hurricanes, is returning to pre-hurricane growth rates. World oil demand growth is expected to be stronger in 2006 than 2005. Non-OPEC oil supply is expected to grow by less than world demand in both 2005 and 2006. This will require either: More OPEC production, limiting any large increase in spare production capacity, or Inventories will be drawn down, keeping them low on a days supply basis. Thus, oil markets are expected to remain tight in 2006.