Slide 11 of 18
Notes:
- U.S. distillate demand during the last winter (1999-00) was almost 5% higher than in the prior year, due mainly to diesel demand growth, since warm weather kept heating oil demand from growing much.
- Last December, when stocks dropped below the normal band, demand was almost 12% stronger than the prior year, although U.S. temperatures were only 6% colder.
- December demand seemed stronger than the weather would have indicated. Some of this strength may have come from Y2K activities. For example, anecdotal evidence indicates some utilities removed themselves from the natural gas system and used distillate during the year turnover to assure uninterrupted electricity supply.
- Demand is expected to increase 3.2% this winter over last. The forecast assumes normal winter weather, which would be 11% colder than we experienced last winter. Demand growth is expected to be slightly lower than in the prior year in spite of the colder weather as a result of the economy slowing and higher prices dampening diesel demand.
- This forecast is highly uncertain. It depends on weather, the economy, and even the natural gas market. Today’s very high natural gas prices can increase distillate demand by large consumers as they switch from natural gas to heating oil.
