Slide 8 of 27

This chart shows how last winter’s warm weather kept demand down.

If we see normal winter weather this heating season, distillate demand will average 3.3 percent higher than last winter.

But as shown earlier, the high inventories going into this winter will temper the price impact of higher demand.

The general drift upward of the demand lines in the chart illustrate the underlying positive trend in distillate use, driven by transportation diesel fuel demand. From 1991 through 1998, distillate demand has grown an estimated 2.8 percent annually.