Outlook from Early 2007 Perspective
•Crude price forecasts high
•Oil sands optimism
•Biofuel growth planned – especially ethanol
•Petroleum demand growth continuing
•Tight distillate demand expected to stay tight
•Refining margins improved – Golden Age
•Refinery capacity tight – plans for expansion & upgrading
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Source: Supply: EIA, FACTS, company presentations, Oil and Gas Journal, Hydrocarbon Processing Boxscore.; Demand: EIA, BP World Statistical World Review 2006, FACTS, IEA
SSo stepping back, in 2007 we were seeing a future with:
–High crude oil prices, which in turn supported development of oil sands and more use of biofuels.
–Policy changes worldwide that were supporting more biofuel use.
–Petroleum demand still growing strongly.
–Distillate markets expected to stay particularly tight.
–Good refining margins for several years – and hopes for a “Golden Age” for this industry emerging
–Refining capacity remaining tight in general, and a large number of expansion and upgrading plans emerging.

SYet some concerns were being voiced.  Were the expansion plans going to result in an over-supply of capacity?  The chart shows that at that time, the main capacity additions in the Middle East and Asia might exceed demand increases in those regions, but demand seemed healthy.