Oil Market Report

Crude market tightening rapidly in Q3

23 AUGUST 2012

SEB Oil Market Report

Crude oil market

In the short-term, we expect a continued strong crude oil price with a substantially tighter market balance in Q3-12 vs. Q2-12. Fewer disappointing macroeconomic figures vs. expectations, market confidence in policymakers credibility and indications of imminent measures to stimulate growth also support the commoditys current strength. Absent a further wave of global pessimism, and there are a lot of potential pitfalls, we expect Brent crude to trade above $110/b during the next 1-2 months. Subsequently, prices should ease, at least temporarily, in late September or early October as North Sea maintenance end and South Sudanese oil flows resume following the countrys transit fee agreement with Sudan. Additional supply from Saudi Arabia, Iraq and Libya in coming months will be limited at best. We forecast an average Brent price of $110/b in both Q3 and Q4, representing a downward revision of $5/b in Q4. Growth will accelerate modestly in 2013, albeit sufficiently to ensure oil prices remain well above the minimum desired by Saudi Arabia, i.e. $100/b. We revise our 2013 average price forecast down $2.5/b to $110/b. However, the range of possible outcomes is very wide due, for example, to the Eurozone crisis, the extremely sensitive geopolitical situation in the Middle East and Chinese growth uncertainties. In the short-term, the Atlantic hurricane season may also prove a wildcard. The Atlantic basin is increasingly affected by the Iranian oil embargo which is impacting the overall market balance and producing a scarcity of particularly sour and heavy qualities. The current situation underlines the challenges refiners face due to volatile production (e.g. from Libya, Sudan and Iran). Furthermore, the light sweet market has also tightened due to imminent large-scale North Sea maintenance. With BFOE the pricing benchmark for a substantial share of the global oil market, expected September loading of 700 kb/d is a very small amount indeed. The fact that Nigerian oil is once again finding buyers after struggling with lower US demand is a good indicator that the light sweet market is tightening. Demand has also been affected by Atlantic basin refinery closures hitting non-complex refineries, typically consumers of light sweet crude. Under no circumstances should the gravity of the situation in the Middle East be underestimated, threatening as it does to drive oil prices much higher, undermining already weak global growth. The Iranian issue is as far removed as ever from being resolved with global superpowers increasingly polarized on how to proceed. A similar situation applies in Syria, now overspilling into neighbouring countries. Other regional conflicts could restart at any time.

Crude oil price

(NYMEX/ICE, $/b, front month, daily closing)
10 3 15 2 10 2 15 1 10 1 15 0 10 0 9 5 9 0 8 5 8 0 7 5 7 0 ja -1 n 0 fe -1 b 0 m r-1 a 0 a r-1 p 0 m j-1 a 0 ju -1 n 0 ju 0 l-1 ag 0 u -1 se -1 p 0 o 0 kt-1 n v-1 o 0 d c-1 e 0 ja -1 n 1 fe -1 b 1 m r-1 a 1 a r-1 p 1 m j-1 a 1 ju -1 n 1 ju 1 l-1 ag 1 u -1 se -1 p 1 o 1 kt-1 n v-1 o 1 d c-1 e 1 ja -1 n 2 fe -1 b 2 m r-1 a 2 a r-1 p 2 m j-1 a 2 ju -1 n 2 ju 2 l-1 ag 2 u -1
21 00 21 01 21 02 21 03 o 9 kt-0 o 0 kt-1 o 1 kt-1 a r-1 p 0 a r-1 p 1 a r-1 p 2 ju 0 l-1 ju 1 l-1 ja -1 n 0 ja -1 n 1

N E WI YM X T IC Bre t E n

6 5

global IEA global crude oil demand estimates

(mb/d)
9 2 9 1 9 0 8 9 8 8 8 7 8 6 8 5 8 4 8 3 8 2 8 1 8 0 7 9 ju 9 l-0 ja -1 n 2 ju 2 l-1

Chart Sources: IEA, Bloomberg, SEB Commodity Research

Monthly global crude oil demand estimates

2012 (mb/d) 89.6 88.83 88.72 Revision (kb/d) -250 +190 +30 2013 (mb/d) 90.5 89.70 89.52 Revision (kb/d) -400 +330 +30

IEA EIA OPEC

SEB average Brent crude oil price forecast

($/b) 2012 2013 Q1 (118) 105 Q2 (109) 105 Q3 110 115 Q4 110 115 Full Year 111.8 110.0

SEB Oil Market Report

Crude oil
Crude oil price
(NYMEX/ICE, $/b, front month, weekly closing)
10 5 10 4 10 3 10 2 10 1 10 0 9 0 8 0 7 0 6 0 5 0 4 0 3 0 2 0 1 0 20 03 20 04 20 05 20 06 20 07 20 08 20 09 21 00 21 01 21 02 N E WI YM X T IC Bre t E n

12 month time spread

(NYMEX/ICE, %, daily closing, >0: contango, <0: backwardation)
1 8 1 6 1 4 1 2 1 0 8 6 4 2 0 -2 -4 -6 -8 -1 0 IC B n E re t N EXW I YM T

futures Brent futures curve

(ICE, $/b)
17 1 15 1 13 1 11 1 19 0 17 0 15 0 13 0 11 0 9 9 9 7 9 5 9 3 9 1 8 9 8 7 ja -1 n 3 ja -1 n 4 ja -1 n 5 ju 3 l-1 ju 4 l-1 a r-1 p 3 a r-1 p 4 a r-1 p 5 o 2 kt-1 o 3 kt-1 o 4 kt-1 1 -0 -2 2 6 2 1 -0 -2 2 7 0 1 -0 -2 2 8 2

WTI futures curve

(NYMEX, $/b)
10 0 9 9 9 8 9 7 9 6 9 5 9 4 9 3 9 2 9 1 9 0 8 9 8 8 8 7 8 6 8 5 8 4 8 3 8 2 8 1 8 0 7 9 ju 3 l-1 ju 4 l-1 o 2 kt-1 o 3 kt-1 o 4 kt-1 ja -1 n 3 ja -1 n 4 ja -1 n 5 a r-1 p 3 a r-1 p 4 a r-1 p 5 1 -0 -2 2 6 2 1 -0 -2 2 7 0 1 -0 -2 2 8 2

ja -1 n 6

ju 5 l-1

a r-1 p 6

o 5 kt-1

ju 6 l-1

o 6 kt-1

ju 5 l-1

o 5 kt-1

ju 6 l-1

Speculative positions WTI

(NYMEX, lots, futures and options, weekly data)
400 500 400 000 300 500 300 000 200 500 200 000 100 500 100 000 500 00 0 20 08 20 09 21 00 21 01 21 02 Sh rt o Ln og Nt e

Benchmark spreads
(daily closing)
8 6 4 2 0 -2 -4 -6 -8 -1 0 -1 2 -1 4 -1 6 -1 8 -2 0 -2 2 -2 4 -2 6 -2 8

W I m u Bre t T in s n Bre t m u D b i n in s u a Bre t m u U ls n in s ra

Chart Sources: Bloomberg, SEB Commodity Research

ja -1 n 0 fe -1 b 0 m r-1 a 0 a r-1 p 0 m j-1 a 0 ju -1 n 0 ju 0 l-1 ag 0 u -1 se -1 p 0 o 0 kt-1 n v-1 o 0 d c-1 e 0 ja -1 n 1 fe -1 b 1 m r-1 a 1 a r-1 p 1 m j-1 a 1 ju -1 n 1 ju 1 l-1 ag 1 u -1 se -1 p 1 o 1 kt-1 n v-1 o 1 d c-1 e 1 ja -1 n 2 fe -1 b 2 m r-1 a 2 a r-1 p 2 m j-1 a 2 ju -1 n 2 ju 2 l-1 ag 2 u -1

o 6 kt-1

ja -1 n 6

a r-1 p 6

ja -1 n 0 fe -1 b 0 m r-1 a 0 a r-1 p 0 m j-1 a 0 ju -1 n 0 ju 0 l-1 ag 0 u -1 se -1 p 0 o 0 kt-1 n v-1 o 0 d c-1 e 0 ja -1 n 1 fe -1 b 1 m r-1 a 1 a r-1 p 1 m j-1 a 1 ju -1 n 1 ju 1 l-1 ag 1 u -1 se -1 p 1 o 1 kt-1 n v-1 o 1 d c-1 e 1 ja -1 n 2 fe -1 b 2 m r-1 a 2 a r-1 p 2 m j-1 a 2 ju -1 n 2 ju 2 l-1 ag 2 u -1

SEB Oil Market Report

Crude oil
inventories US crude oil inventories
(DOE, mb, weekly data)
39 0 38 0 37 0 36 0 35 0
c

OECD total industry oil stocks

(mb, monthly data)
2800 2775 2750 2725 2700 2675 2650 2625 5 year range, top 5 year range, bottom 2012 5 year av erage

34 0 33 0 32 0 31 0 j f m a m j j a s o n d 5 year av rage e 2011 2012

2600 2575 2550 2525 j f m a m j j a s o n d

OECD Europe industry oil stocks

(mb, monthly data)
1020 1010 1000 990 980 970 960 950 940 930 920 910 900 j f m a m j j a s o n d 5 year range, top 5 year range, bottom 2012 5 year av erage

OECD North America industry oil stocks

(mb, monthly data)
1400 1375 1350 1325 1300 1275 1250 1225 1200 1175 j f m a m j j a s o n d 5 year range, top 5 year range, bottom 2012 5 year av erage

OECD Asia & Oceania industry oil stocks

(mb, monthly data)
450 445 440 435 430 425 420 415 410 405 400 395 390 385 380 375 j f m a m j j a s o n d 5 year range, top 5 year range, bottom 2012 5 year av erage

OPEC production
(kb/d, monthly data)
300 30 O C 2 p d ctio PE -1 ro u n 300 20 300 10 300 00 200 90 200 80 200 70 200 60 200 50 ja -0 n 8 m r-0 a 8 m j-0 a 8 ju 8 l-0 se -0 p 8 n v-0 o 8 ja -0 n 9 m r-0 a 9 m j-0 a 9 ju 9 l-0 se -0 p 9 n v-0 o 9 ja -1 n 0 m r-1 a 0 m j-1 a 0 ju 0 l-1 se -1 p 0 n v-1 o 0 ja -1 n 1 m r-1 a 1 m j-1 a 1 ju 1 l-1 se -1 p 1 n v-1 o 1 ja -1 n 2 m r-1 a 2 m j-1 a 2 ju 2 l-1 200 40 O C 1 p d ctio PE -1 ro u n

Chart Sources: Bloomberg, IEA, SEB Commodity Research

SEB Oil Market Report

European oil product markets

Atlantic basin refinery utilisation is high but will begin to decrease going forward as the pre-winter maintenance season starts. This situation will exert even more pressure on already tight middle distillate markets, especially when pre-winter restocking intensifies. Currently, distillates worldwide are tight with refineries maximising diesel production. Overall, high refining margins for middle distillates and gasoline ensure satisfactory refinery economics. However, both Atlantic basin refinery shutdowns and recent relatively weak light sweet crude oil markets are key factors. Light ends: The European naphtha market strengthened in August due to higher Asian petrochemical demand. Increased propane prices have once again made naphtha a more competitive alternative. Eastbound cargoes are therefore soaking up part of the surplus caused by weak local petrochemical demand. Still, European inventories are very high. Gasoline blending pool demand remains the biggest local supporter of European naphtha prices. Even if inventories and demand were not already driving the European gasoline market forward, equally bullish US conditions would have absorbed any cargoes available. Nevertheless, while US implied demand has risen sharply in recent weeks, speculative positioning views concerning the future outlook are strongly polarized. Middle distillates: Middle distillate cracks remain high and stable, as indeed they have been for over a year, with few indications of any near-term changes. European diesel is tight, despite producers maximising production. With US inventories also abnormally low there is little hope of relief from that source. The European jet market is reasonably well balanced but stronger regional demand in the east has attracted arbitrage flows from time to time. However, there is little jet fuel available in European inventories to send. While gasoil is currently the weakest component in the middle distillate range, it could tighten as tankers currently avoid Europe and winter restocking picks up. Given tight global middle distillate markets this part of the barrel is unlikely to weaken in the short- to medium-term, particularly with refinery maintenance imminent. Heavy ends: The heavy end of the barrel has weakened over the summer with cracks falling back from early summer highs. Sufficient cargoes have forestalled concerns regarding tight Asian markets. Currently, the flow appears to have stopped due to plentiful inventories and weak demand. While the low sulphur fuel oil crack remains relatively healthy, the high sulphur crack has returned to early-year lows. Going forward, the current high-low differential appears more likely to narrow.

light European light end benchmarks

($/t, daily closing)
10 20 15 10 10 10 15 00 10 00 90 5 90 0 80 5 80 0 70 5 70 0 60 5 ja -1 n 0 fe -1 b 0 m r-1 a 0 a r-1 p 0 m j-1 a 0 ju -1 n 0 ju 0 l-1 ag 0 u -1 se -1 p 0 o 0 kt-1 n v-1 o 0 d c-1 e 0 ja -1 n 1 fe -1 b 1 m r-1 a 1 a r-1 p 1 m j-1 a 1 ju -1 n 1 ju 1 l-1 ag 1 u -1 se -1 p 1 o 1 kt-1 n v-1 o 1 d c-1 e 1 ja -1 n 2 fe -1 b 2 m r-1 a 2 a r-1 p 2 m j-1 a 2 ju -1 n 2 ju 2 l-1 ag 2 u -1 Je fu l t e D se 1 p m ie l 0 p G so 0 % a il .1 ja -1 n 0 fe -1 b 0 m r-1 a 0 a r-1 p 0 m j-1 a 0 ju -1 n 0 ju 0 l-1 ag 0 u -1 se -1 p 0 o 0 kt-1 n v-1 o 0 d c-1 e 0 ja -1 n 1 fe -1 b 1 m r-1 a 1 a r-1 p 1 m j-1 a 1 ju -1 n 1 ju 1 l-1 ag 1 u -1 se -1 p 1 o 1 kt-1 n v-1 o 1 d c-1 e 1 ja -1 n 2 fe -1 b 2 m r-1 a 2 a r-1 p 2 m j-1 a 2 ju -1 n 2 ju 2 l-1 ag 2 u -1
H h su h r fu l o (3 % ig lp u e il .5 ) L w su h r fu l o (1 % o lp u e il .0 )

N p th ah a G so e a lin

60 0

middle European middle distillate benchmarks

($/t, daily closing)
15 10 10 10 15 00 10 00 90 5 90 0 80 5 80 0 70 5 70 0 60 5 60 0 50 5

European fuel oil benchmarks

($/t, daily closing)
80 0 75 7 70 5 75 2 70 0 65 7 60 5 65 2 60 0 55 7 50 5 55 2 50 0 45 7 40 5 45 2 40 0 35 7 30 5

Chart Sources: Bloomberg, SEB Commodity Research

ja -1 n 0 fe -1 b 0 m r-1 a 0 a r-1 p 0 m j-1 a 0 ju -1 n 0 ju 0 l-1 ag 0 u -1 se -1 p 0 o 0 kt-1 n v-1 o 0 d c-1 e 0 ja -1 n 1 fe -1 b 1 m r-1 a 1 a r-1 p 1 m j-1 a 1 ju -1 n 1 ju 1 l-1 ag 1 u -1 se -1 p 1 o 1 kt-1 n v-1 o 1 d c-1 e 1 ja -1 n 2 fe -1 b 2 m r-1 a 2 a r-1 p 2 m j-1 a 2 ju -1 n 2 ju 2 l-1 ag 2 u -1

SEB Oil Market Report

Oil products
gasoline US gasoline and distillate inventories
(DOE, mb, weekly data)
20 4 20 3 20 2 20 1 20 0 10 9 10 8 10 7 10 6 10 5 10 4 10 3 10 2 10 1 j f m a m j j a s o n d G so e 5 ye r a e g a lin a v ra e G so e 2 1 a lin 0 2 D istilla fu l o 5 ye r a e g te e il a v ra e D istilla fu l o 2 1 te e il 0 2

US product benchmarks
(NYMEX, /gal, front month, daily closing)
30 6 30 5 30 4 30 3 30 2 30 1 30 0 20 9 20 8 20 7 20 6 20 5 20 4 20 3 20 2 20 1 20 0 10 9 10 8 G so e a lin H a go e tin il

refinery US refinery utilization

(%, weekly data)
9 3 9 2 9 1 9 0 8 9 8 8 8 7 8 6 8 5 8 4 8 3 8 2 8 1 j f m a m j j a s o n d 2 0 -2 1 a g 0 7 0 1 v. 21 02

ICE Gasoil and European premiums to Gasoil

($/t, daily closing)
10 10 15 00 10 00 90 5 90 0 80 5 80 0 70 5 70 0 60 5 60 0 50 5 IC G so 0 % (le E a il .1 ft) Je fu l p m m (rig t) t e re iu h D se 1 p m p m m (rig t) ie l 0 p re iu h
ja -1 n 0 fe -1 b 0 m r-1 a 0 a r-1 p 0 m j-1 a 0 ju -1 n 0 ju 0 l-1 ag 0 u -1 se -1 p 0 o 0 kt-1 n v-1 o 0 d c-1 e 0 ja -1 n 1 fe -1 b 1 m r-1 a 1 a r-1 p 1 m j-1 a 1 ju -1 n 1 ju 1 l-1 ag 1 u -1 se -1 p 1 o 1 kt-1 n v-1 o 1 d c-1 e 1 ja -1 n 2 fe -1 b 2 m r-1 a 2 a r-1 p 2 m j-1 a 2 ju -1 n 2 ju 2 l-1 ag 2 u -1

European product cracks

($/b, daily closing)
3 5 3 0 2 5 2 0 1 5 1 0 5 0 -5 -1 0 -1 5 -2 0 ja -1 n 0 fe b-10 m r-1 a 0 a r-1 p 0 m j-1 a 0 ju -1 n 0 ju 0 l-1 ag 0 u -1 se -1 p 0 o 0 kt-1 n v-1 o 0 d c-1 e 0 ja -1 n 1 fe b-11 m r-1 a 1 a r-1 p 1 m j-1 a 1 ju -1 n 1 ju 1 l-1 ag 1 u -1 se -1 p 1 o 1 kt-1 n v-1 o 1 d c-1 e 1 ja -1 n 2 fe b-12 m r-1 a 2 a r-1 p 2 m j-1 a 2 ju -1 n 2 ju 2 l-1 ag 2 u -1 -2 5 N p th ah a J fu l et e L w su h r fu l o o lp u e il D sel 1 p m ie 0 p G lin aso e G il 0 % aso .1 H su hu fu l o igh lp r e il

low high European low - h igh sulphur fuel oil differential

($/t, daily closing)
7 5 7 0 6 5 6 0 5 5 5 0 4 5 4 0 3 5 3 0 2 5 2 0 1 5 1 0 5 0 -5 -1 0 -1 5

Chart Sources: Bloomberg, SEB Commodity Research

ja -1 n 0 fe -1 b 0 m r-1 a 0 a r-1 p 0 m j-1 a 0 ju -1 n 0 ju 0 l-1 ag 0 u -1 se -1 p 0 o 0 kt-1 n v-1 o 0 d c-1 e 0 ja -1 n 1 fe -1 b 1 m r-1 a 1 a r-1 p 1 m j-1 a 1 ju -1 n 1 ju 1 l-1 ag 1 u -1 se -1 p 1 o 1 kt-1 n v-1 o 1 d c-1 e 1 ja -1 n 2 fe -1 b 2 m r-1 a 2 a r-1 p 2 m j-1 a 2 ju -1 n 2 ju 2 l-1 ag 2 u -1

ja -1 n 0 fe -1 b 0 m r-1 a 0 a r-1 p 0 m j-1 a 0 ju -1 n 0 ju 0 l-1 ag 0 u -1 se -1 p 0 o 0 kt-1 n v-1 o 0 d c-1 e 0 ja -1 n 1 fe -1 b 1 m r-1 a 1 a r-1 p 1 m j-1 a 1 ju -1 n 1 ju 1 l-1 ag 1 u -1 se -1 p 1 o 1 kt-1 n v-1 o 1 d c-1 e 1 ja -1 n 2 fe -1 b 2 m r-1 a 2 a r-1 p 2 m j-1 a 2 ju -1 n 2 ju 2 l-1 ag 2 u -1

10 1 10 0 9 0 8 0 7 0 6 0 5 0 4 0 3 0 2 0 1 0 0 -1 0 -2 0

SEB Oil Market Report

Oil products
3Regional 3-2-1 cracks
($/b, daily closing)
3 8 3 6 3 4 3 2 3 0 2 8 2 6 2 4 2 2 2 0 1 8 1 6 1 4 1 2 1 0 8 6 4 2 0 -2 -4 -6 Asia (M a in s) U (W I) S T Eu p (Bre t) ro e n Pe n G lf (D b i) rsia u ua

European naphtha stocks

(kt, monthly data)
10 6 10 5 10 4 10 3 10 2 10 1 10 0 9 0 8 0 7 0 6 0 5 0 4 0 3 0 2 0 j f m a m j j a s o n d 4 ye r ra g , to a ne p 4 ye r ra g , b tto a ne o m 21 02 4 ye r a e g a v ra e

European gasoline stocks

(kt, monthly data)
15 10 10 10 15 00 10 00 90 5 90 0 80 5 80 0 70 5 70 0 60 5 60 0 50 5 50 0 40 5 40 0 j f m a m j j a s o n d 4 ye r ra g , to a ne p 4 ye r ra g , b tto a ne o m 21 02 4 ye r a e g a v ra e

ja -1 n 0 fe -1 b 0 m r-1 a 0 a r-1 p 0 m j-1 a 0 ju -1 n 0 ju 0 l-1 ag 0 u -1 se -1 p 0 o 0 kt-1 n v-1 o 0 d c-1 e 0 ja -1 n 1 fe -1 b 1 m r-1 a 1 a r-1 p 1 m j-1 a 1 ju -1 n 1 ju 1 l-1 ag 1 u -1 se -1 p 1 o 1 kt-1 n v-1 o 1 d c-1 e 1 ja -1 n 2 fe -1 b 2 m r-1 a 2 a r-1 p 2 m j-1 a 2 ju -1 n 2 ju 2 l-1 ag 2 u -1

European jet fuel stocks

(kt, monthly data)
90 0 80 5 80 0 70 5 70 0 60 5 60 0 50 5 50 0 40 5 40 0 30 5 30 0 20 5 20 0 10 5 10 0 j f m a m j j a

4 ye r ra g , to a ne p 4 ye r ra g , b tto a ne o m 21 02 4 ye r a e g a v ra e s o n d

European gasoil stocks

(kt, monthly data)
30 10 30 00 20 90 20 80 20 70 20 60 20 50 20 40 20 30 20 20 20 10 20 00 10 90 10 80 10 70 10 60 10 50 10 40 10 30 10 20 10 10 10 00 j f

European fuel oil stocks

(kt, monthly data)
15 00 10 00 90 5 90 0 80 5 80 0 70 5 70 0 60 5 60 0 50 5 50 0 40 5 40 0 4 ye r ra g , to a ne p 4 ye r ra g , b tto a ne o m 21 02 4 ye r a e g a v ra e

4 ye r ra g , to a ne p 4 ye r ra g , b tto a ne o m 21 02 4 ye r a e g a v ra e

Chart Sources: Bloomberg, PJK International, SEB Commodity Research

SEB Oil Market Report

Oil products
US implied crude oil demand
(DOE, mb/d, weekly data)
1 ,8 5 1 ,6 5 1 ,4 5 1 ,2 5 1 ,0 5 1 ,8 4 1 ,6 4 1 ,4 4 1 ,2 4 1 ,0 4 1 ,8 3 1 ,6 3 1 ,4 3 j f m a m j j a s o n d 5 ag y v. 21 01 21 02
8,9 9,1 5y av . g 20 11 20 12 9,3 9,5

US implied gasoline demand

(DOE, mb/d, weekly data)
9,7

8,7

8,5 j f m a m j j a s o n d

US implied distillate demand

(DOE, mb/d, weekly data)
5,6 5,4 5,2 5y a g. v 2011 2012

Gasoline arbitrage Rotterdam to New York

($/t, daily closing)
20 15 10 5

5,0 0 4,8 4,6 4,4 4,2 -5 -10 -15 -20

n v-1 o 1

fe -1 b 1 m r-1 a 1

fe -1 b 2 m r-1 a 2

-25

ag 1 u -1

m j-1 a 1

se -1 p 1

4,0 j f m a m j j a s o n d

Middle distillate arbitrage Rotterdam to New York

($/t, daily closing)
20 15 10 5 0 -5 -10 -15 -20 H eating oil/G asoil Jet fuel/K erosene

n v-1 o 1

fe -1 b 1 m r-1 a 1

fe -1 b 2 m r-1 a 2

-25

a r-1 p 2 m j-1 a 2

Chart Sources: Bloomberg, SEB Commodity Research

m j-1 a 1

se -1 p 1

ag 1 u -1

d c-1 e 1

ag 2 u -1

o 1 kt-1

a r-1 p 1

ja -1 n 1

ju -1 n 1

ja -1 n 2

ju -1 n 2

ju 1 l-1

ju 2 l-1

d c-1 e 1

a r-1 p 2 m j-1 a 2

ag 2 u -1

ju -1 n 2

ju -1 n 1

ja -1 n 1

a r-1 p 1

o 1 kt-1

ja -1 n 2

ju 1 l-1

ju 2 l-1

SEB Oil Market Report

Related energy markets

US natural gas price
(NYMEX, $/MMBtu, front month, weekly closing)
14 13 12 11 10 9 8 7 6 5 4 3 2 1

UK natural gas price

(ICE, front month, weekly closing)
16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 10 40 30 20 50 $/M Btu (left axis) M G Bp/therm (right axis) 90 80 70 60

20 07

20 08

20 09

21 00

21 01

21 02

20 07

20 08

20 09

21 00

21 01

Nordic power price

(Nord Pool, /MWh, front quarter, weekly closing)
80 75 70 65 60 55 50 45 40 35 30 25 20

Continental power price

(EEX, /MWh, front quarter, weekly closing)
95 90 85 80 75 70 65 60 55 50 45 40 35 30 25 20

20 07

20 08

20 09

21 00

21 01

21 02 21 02

20 09

21 00

21 01

EUA price
(ECX ICE, /t, Dec. 11, weekly closing)
34 32 30 28 26 24 22 20 18 16 14 12 10 8 6

21 02

Coal price
(CIF ARA steam coal, API#2, daily closing)
135 130 125 120 115 110 105 100 95 90 85 80 75 70

20 07

20 08

20 09

21 00

21 01

Chart Sources: Bloomberg, SEB Commodity Research

21 02

a r-1 p 0 m j-1 a 0 ju -1 n 0 ju 0 l-1 ag 0 u -1 se -1 p 0 o 0 kt-1 n v-1 o 0 d c-1 e 0 ja -1 n 1 fe -1 b 1 m r-1 a 1 a r-1 p 1 m j-1 a 1 ju -1 n 1 ju 1 l-1 ag 1 u -1 se -1 p 1 o 1 kt-1 n v-1 o 1 d c-1 e 1 ja -1 n 2 fe -1 b 2 m r-1 a 2 a r-1 p 2 m j-1 a 2 ju -1 n 2 ju 2 l-1 ag 2 u -1

SEB Oil Market Report

Market indicators
MSCI World equity market index
(weekly closing)
1700 1600 1500 1400 1300 1200 1100 1000 900 800 700 600

UBS Bloomberg CMCI commodity market index

(price index, weekly closing)
1800 1700 1600 1500 1400 1300 1200 1100 1000 900 800 700 600

20 05

20 06

20 07

20 08

20 09

21 00

21 01

21 02

20 05

20 06

20 07

20 08

20 09

21 00

21 01

JPM global manufacturing PMI

(monthly, PMIs >50 expansive)
58 56 54 52 50 48 46 44 42 40 38 36 34 32

Regional PMI:s
(monthly data)
6 5 6 0 5 5 5 0 4 5 4 0 3 5 3 0 U S Eu zo e ro n C in h a R fe n e re ce

20 05

20 06

20 07

20 08

20 09

21 00

21 01

Regional industrial production growth

(%, y/y, monthly data)
2 5 2 0 1 5 1 0 5 0 -5 -1 0 -1 5 -2 0 -2 5 m r-0 a 6 ju -0 n 6 se -0 p 6 d c-0 e 6 m r-0 a 7 ju -0 n 7 se -0 p 7 d c-0 e 7 m r-0 a 8 ju -0 n 8 se -0 p 8 d c-0 e 8 m r-0 a 9 ju -0 n 9 se -0 p 9 d c-0 e 9 m r-1 a 0 ju -1 n 0 se -1 p 0 d c-1 e 0 m r-1 a 1 ju -1 n 1 se -1 p 1 d c-1 e 1 m r-1 a 2 ju -1 n 2 U S Eu zo e ro n C in h a

21 02

OECD composite leading indicators

(monthly, 100 corresponds to long term trend growth in industrial production)
14 0 13 0 12 0 11 0 10 0 9 9 9 8 9 7 9 6 9 5 9 4 9 3 20 05 20 06 20 07 20 08 20 09 21 00 21 01 21 02 C in h a Eu zo e ro n O D EC U SA R fe n e re ce

Chart Sources: Bloomberg, OECD, SEB Commodity Research

m r-0 a 6 ju -0 n 6 se -0 p 6 d c-0 e 6 m r-0 a 7 ju -0 n 7 se -0 p 7 d c-0 e 7 m r-0 a 8 ju -0 n 8 se -0 p 8 d c-0 e 8 m r-0 a 9 ju -0 n 9 se -0 p 9 d c-0 e 9 m r-1 a 0 ju -1 n 0 se -1 p 0 d c-1 e 0 m r-1 a 1 ju -1 n 1 se -1 p 1 d c-1 e 1 m r-1 a 2 ju -1 n 2

10

21 02

SEB Oil Market Report

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Disclosures
The analysis and valuations, projections and forecasts contained in this report are based on a number of assumptions and estimates and are subject to contingencies and uncertainties; different assumptions could result in materially different results. The inclusion of any such valuations, projections and forecasts in this report should not be regarded as a representation or warranty by or on behalf of the SEB Group or any person or entity within the SEB Group that such valuations, projections and forecasts or their underlying assumptions and estimates will be met or realized. Past performance is not a reliable indicator of future performance. Foreign currency rates of exchange may adversely affect the value, price or income of any security or related investment mentioned in this report. This document does not constitute investment advice and is being provided to you without regard to your investment objectives or circumstances. Anyone considering taking actions based upon the content of this document is urged to base investment decisions upon such investigations as they deem necessary. This document does not constitute an offer or an invitation to make an offer, or solicitation of, any offer to subscribe for any securities or other financial instruments.

Conflicts of Interest
SEB has in place a Conflicts of Interest Policy designed, amongst other things, to promote the independence and objectivity of reports produced by its Research departments, which are separated from the rest of SEB business areas by information barriers; as such, research reports are independent and based solely on publicly available information. Your attention is drawn to the fact that a member of, or an entity associated with, SEB or its affiliates, officers, directors, employees or shareholders of such members (a) may be represented on the board of directors or similar supervisory entity of the companies mentioned herein (b) may, to the extent permitted by law, have a position in the securities of (or options, warrants or rights with respect to, or interest in the securities of the companies mentioned herein or may make a market or act as principal in any transactions in such securities (c) may, acting as principal or as agent, deal in investments in or with companies mentioned herein, and (d) may from time to time provide investment banking, underwriting or other services to, or solicit investment banking, underwriting or other business from the companies mentioned herein.

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The SEB Group: members, memberships and regulators Skandinaviska Enskilda Banken AB (publ) is incorporated in Sweden, as a Limited Liability Company. It is regulated by Finansinspektionen, and by the local financial regulators in each of the jurisdictions in which it has branches or subsidiaries, including in the UK, by the Financial Services Authority; Denmark by Finanstilsynet; Finland by Finanssivalvonta; Germany by Bundesanstalt fr Finanzdienstleistungsaufsicht and Norway by Finanstilsynet. In the US, SEBAB is a U.S. broker-dealer, registered with the Financial Industry Regulatory Authority (FINRA). SEBAB is a direct subsidiary of SEB. SEB is active on major Nordic and other European Regulated Markets and Multilateral Trading Facilities, in as well as other non-European equivalent markets, for trading in financial instruments. For a list of execution venues of which SEB is a member or participant, visit http://www.seb.se.

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SEB Commodity Research

Bjarne Schieldrop, Chief Commodity Analyst bjarne.schieldrop@seb.no +47 9248 9230 Filip Petersson, Commodity Strategist filip.petersson@seb.se +46 8 506 230 47

www.seb.se