|SThe higher diesel margin relative to gasoline seen in the
last couple of years is primarily a reflection of the tighter distillate
supply/demand balance in the Atlantic Basin.
ULSD adds some price pressure to the system, but pressure was building
apart from ULSD. The pressures
tightening the diesel market in the past few years are likely to continue.
|SOn the other hand, factors are in play that are diminishing
the need for increased petroleum-based gasoline supply.
|SWhile the market always presents uncertainties about the
future, the market in combination with policies driven by GHG and energy
security are presenting the potential for some major changes in the
future. No one has a good crystal ball
at this point. A scenario approach is
needed to understand how different factors could evolve to change market
direction. And creative management is
needed more than ever to be able to take advantage of the market
opportunities that may evolve, while avoiding the potential pitfalls.