The characteristics of the downstream sector of the petroleum industry have changed significantly over the past decade. This paper describes the reduction in supplies of overseas equity crude available to integrated companies, decline in consumption of fuel products, changing configuration of United States refineries to use heavy and sour crude, disappearance of subsidies for small refiners in the United States, changing structure of the crude oil market and crude pricing mechanisms, and the growing importance of petroleum futures markets. The paper also discusses effects of these changes, particularly as they relate to demand for and pricing of domestic crude oil, and draws conclusions regarding the future paths these trends may take, resulting changes that may occur in his sector of the industry, and possible effects on the exploration and production sectors of the industry.

End_of_Article - Last_Page 541------------