Neste Oil's Interim Report for January-March 2014 - Seite 3

Outlook

Developments in the global economy have been reflected in the oil, renewable fuel, and renewable feedstock markets, and volatility in these markets is expected to continue. Global oil demand is generally anticipated to increase by more than 1 million bbl/d in 2014, but, as in 2013, this growth will be more than compensated for by new refining capacity in Asia and the Middle East. This is expected to lead to continued high product imports from the Middle East and the US into Europe. Diesel is projected to be the strongest part of the barrel, while gasoline margins are expected to improve seasonally during the spring and summer.

Vegetable oil price differentials are expected to vary, depending on crop outlooks, weather phenomena, and variations in demand for different feedstocks, but no fundamental changes in the drivers influencing long term average feedstock price differentials are expected. Consequently, price differentials are likely to widen from the current narrow levels during 2014 in both Europe and North America.

Uncertainties regarding political decision-making in the US are likely to be reflected in the renewable fuel market. Examples of pending decisions include volume targets for biomass-based diesel and the possible reintroduction of the Blender's Tax Credit (BTC), which both impact the US market. Reintroduction of the BTC for 2014 and 2015 has made some progress in the US Congress and would impact Neste Oil's result positively.

The Singapore NEXBTL refinery is scheduled for a major turnaround lasting approx. eight weeks during the third and fourth quarter of 2014.

The Group's investments are expected to total approx. EUR 300-350 million in 2014.

First-quarter refining margins and renewable fuels margins were softer than previously expected. Neste Oil has revised its guidance and now expects the Group's full-year comparable operating profit to be EUR 450 million +/- 10% in 2014. Previously the full-year operating profit was expected to be at the level of EUR 500 million. Neste Oil's reference refining margin is assumed to average USD 4.0/bbl during the year compared to the previous estimate of USD 4.5/bbl. Narrow feedstock price differentials are expected to weaken Renewable Fuels' profitability during the first half of the year, but should gradually widen thereafter. The company will also continue its performance improvement actions to defend good profitability in 2014.