Slide 15 of 27

Primary inventory is the second major source of supply after production for winter propane use.

As with distillate, propane preheating-season stocks are very high. Stocks ended last winter higher than the normal range. March inventories were 30 million barrels, a level not seen for six years.

In addition, the buildup of U.S. inventories through September 1998 was one of the largest ever, measuring approximately 40 million barrels. As of September 30, U.S. inventories of propane stood at an estimated 75.9 million barrels, the highest level since November 1981.

Projections are for inventories to remain above the normal range this winter, in spite of higher residential use being forecast.

Even if the near-record corn crop boosts dryer demand higher than expected, or 10 percent colder weather than normal occurs, stocks should be adequate for winter needs.