Trends, Cycles, and Kinks

Trends As Seen from 2007:
Will They Resume?

•Rising crude prices and wide light-heavy price differences encourage changing feedstocks

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•Demand: Growth and mix shift

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•Increase in refining margins – capital expenditure driver

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•Policy shifts towards biofuels & efficiencies

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	S This first section will focus on a number of important long-term trends as seen in 2007. These trends involved demand, feedstocks for refiners, and refinery profitability – the major drivers for refinery investments.

	SIn particular, we had entered an era of rising crude prices and increases in the difference in prices between light and heavy crude oil feedstocks.

	SDemand growth and product mix were changing.

	SRefining margins had picked up.

	SAnd some significant policy changes were happening to shift towards more biofuels and increased energy efficiencies.