Brian,

The Federal Govenment is now forcasting an oil shortage the end of this
year! (see below)

David A. Douthit

===========================



UPDATE: EIA Raises Forecasts For China, World Oil Demand

(Updates to add increase to 1Q 2006 oil demand.)

NEW YORK -(Dow Jones)- The federal Energy Information Administration on
Thursday again raised its forecasts for Chinese oil demand, changes that
boosted the outlook for world oil consumption as a whole.

The upward revisions in the EIA's monthly oil-market outlook reinforce
how demand - already so strong that it has pushed producers and refiners
to the limits of their capacity - continues to grow robustly despite
soaring prices.

Acknowledging the pressure demand is putting on markets, the EIA, the
statistics arm of the U.S. Department of Energy, now sees U.S. benchmark
oil prices holding above $50 a barrel through 2006.

"Several factors have contributed to the recent high crude oil prices
and are likely to keep prices at or near present highs," the EIA wrote.
"First, worldwide petroleum demand growth is projected to remain robust,
despite high oil prices."

While Chinese oil demand - like overall world consumption - isn't
expected to grow as fast as it did in 2004, it is seen growing faster
than expected early this year. The EIA revised its forecasts for Chinese
oil demand in the second and fourth quarters up by 100,000 barrels a day
in each case, to 7.4 million and 7.7 million barrels a day, respectively.

The agency left its outlook for full-year Chinese demand and demand
growth unchanged.

In line with those increases, the EIA boosted its forecasts for second
and third quarter world oil demand by 100,000 barrels a day, to 83.1
million and 84.6 million barrels a day, respectively.

The agency raised its forecast for demand in the fourth quarter by
200,000 barrels a day, to 86.8 million barrels a day. Demand in that
quarter was already expected to test producers' ability to pump more
oil. The new forecast leaves fourth quarter demand 700,000 barrels a day
over projected supply.

And the stress won't end this year. The EIA also raised its forecast for
first quarter 2006 oil demand by 300,000 barrels a day, to 86.9 million
barrels a day, slightly pulling up the outlook for demand growth that year.




"Projections for 2005 and 2006 call for worldwide growth averaging 2.2
million barrels per day, or 2.6 percent, per year, down from the
3.4-percent growth in 2004," the EIA said.

Weaker than expected demand for gasoline in the U.S. this summer was the
exception to the EIA's upward revision. The EIA now sees gasoline demand
of 9.34 million barrels a day in the third quarter, 80,000 barrels a day
below its previous forecast. The change pulled the forecast for overall
U.S. oil demand in the quarter down by 30,000 barrels a day, to 20.95
million barrels a day.

Nevertheless, growth in gasoline demand will be strong enough to push
prices to new records, with the EIA forecasting summer prices of $2.28 a
gallon on average from April to September, up 38 cents from last summer.

"Despite high prices, demand is expected to continue to rise due to the
increasing number of drivers and vehicles and increasing per-capita
vehicle miles traveled," the EIA said.

-By Andrew Dowell, Dow Jones Newswires; 201-938-4430; andrew.dowell@
dowjones.com

DowJones Newswire