Oil Market Report

Light ends under pressure

14 MAY 2012

SEB Oil Market Report

Crude oil market

Currently the greatest uncertainty affecting the crude oil price outlook concerns high OPEC production. In Q1-12, a major market surplus apparently existed with Saudi Arabia, supported by increasing supply from Libya and Iraq, seeking to drive prices downward towards the OPEC basket price target of $100/b. It did so mainly because, even more so than anyone else, the Saudis do not want Iran to possess a nuclear bomb. It is therefore imperative for its leaders that the current embargo on Iranian exports impacts fully, successfully resolving the Iranian nuclear issue. With Saudi Arabia not wanting a high oil price to compensate monetarily for lost Iranian exports, we expect it to continue to try to force prices lower through overproduction, a strategy supported by the expected release of OECD Strategic Petroleum Reserves (SPR), boosting supply further in late Q2 or Q3 this year. These factors together with increasing Libyan and Iraqi production and signs that Iran is willing to resume negotiations all exert downward pressure on our mid-year price projections. The Brent crude oil price was further depressed during April and early May by several negative factors including weak seasonal demand, refinery maintenance, the start of a new round of negotiations with Iran, less positive macroeconomic sentiment, and high OPEC output. Both suppliers and consumers appear to have exploited excessive supplies to build stocks, at least initially undermining the effectiveness of Saudi Arabias attempt to lower prices. Several oil market headwinds have probably peaked and are decreasing as the US driving season approaches, and as refineries begin to ramp up production following the end of their traditional maintenance periods. In addition the market remains supported by several supply side issues (e.g. lost production due to the Sudanese civil war, unrest in Syria and Yemen, North Sea supply disruptions and a faster than expected natural decline in regional production, as well as disputes regarding Kurdish oil payments resulting in supply stoppages). Further, despite the restart of Iranian negotiations the risk of a geopolitical price spike remains high. Indeed, Iran may well have decided to re-enter a fresh round of talks merely to win time. If so, the situation could easily, and rapidly, deteriorate once again. We retain our Brent crude oil price outlook with Q2-12 at $115/b, Q3-12 at $115/b and Q4-12 at $120/b (FY-12 average: $117/b). However, on the one hand, if macroeconomic sentiment remains weak and provided Iranian nuclear negotiations continue, Saudi Arabia is likely to succeed in depressing the OPEC basket price towards $100/b. On the other, if it does so Iran may become increasing reluctant to continue talks, needing higher oil prices to alleviate the countrys current economic problems.

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
20 09 21 00 21 01 21 02 o 9 kt-0 o 0 kt-1 o 1 kt-1 a r-0 p 9 a r-1 p 0 a r-1 p 1

N M WI Y EX 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 a r-1 p 2 ju 9 l-0 ju 0 l-1 ja -0 n 9 ja -1 n 0 ja -1 n 1 ju 1 l-1 ja -1 n 2

Chart Sources: IEA, Bloomberg, SEB Commodity Research

Monthly global crude oil demand estimates

2011 (mb/d) 89.2 87.92 87.77 Revision (kb/d) +70 +/-0 -10 2012 (mb/d) 90.0 88.88 88.67 Revision (kb/d) +80 +70 +30

IEA EIA OPEC

SEB average Brent crude oil price forecast

($/b) 2012 2013 Q1 125 Q2 115 Q3 115 Q4 120 Full Year 117 120

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 Bre t E n N EXW I YM T

Brent futures curve

(ICE, $/b)
17 2 15 2 13 2 11 2 19 1 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 ju -1 n 2 ju -1 n 3 ju -1 n 4 se -1 p 2 d c-1 e 2 ju -1 n 5 se -1 p 3 d c-1 e 3 se -1 p 4 d c-1 e 4 m r-1 a 3 m r-1 a 4 m r-1 a 5 1 -0 -0 2 3 9 1 -0 -1 2 4 1 1 -0 -1 2 5 1

WTI futures curve

(NYMEX, $/b)
10 1 19 0 18 0 17 0 16 0 15 0 14 0 13 0 12 0 11 0 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 ju -1 n 2 se -1 p 2 d c-1 e 2 ju -1 n 3 se -1 p 3 m r-1 a 3 d c-1 e 3 ju -1 n 4 se -1 p 4 m r-1 a 4 d c-1 e 4 m r-1 a 5 1 -0 -0 2 3 9 1 -0 -1 2 4 1 1 -0 -1 2 5 1

se -1 p 5

d c-1 e 5

m r-1 a 6

ju -1 n 6

ju -1 n 5

se -1 p 5

d c-1 e 5

Speculative positions WTI

(NYMEX, lots, futures and options, weekly data)
400 500 So h rt 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 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 B n m u Dbi re t in s u a B n m u U ls re t 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

m r-1 a 6

ju -1 n 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

SEB Oil Market Report

Crude oil
US crude oil inventories
(DOE, mb, weekly data)
38 0 37 0 36 0 35 0 34 0 33 0 32 0 31 0 j f m a m j j a s o n d
c

OECD total industry oil stocks

(mb, monthly data)
2800 2775 2750 2725 2700 2675 2650 2625 2600 2575 2550 2525 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

5 year av erag e 201 1 201 2

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 30 300 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 2 200 40 O PEC 2 p d ctio -1 ro u n O PEC 1 p d ctio -1 ro u n

Chart Sources: Bloomberg, IEA, SEB Commodity Research

SEB Oil Market Report

European oil product markets

Since the beginning of April, European oil products prices have fallen alongside those of crude oil. Corrections in middle and heavy distillates have been similar to those taking place in the crude oil market while others affecting light distillates have been more severe. Their divergence is also reflected in sharply lower naphtha and gasoline cracks with those involving the rest of the barrel either stable or rising. Due to the ever present sovereign debt crisis and its potential implications for demand European refiners currently seek to minimize both crude and product inventories. While the Atlantic basin maintenance season is now ending, it will peak in Asia in Q2. Consequently, we forecast greater future product availability in Europe with only a slightly smaller addition in Asia as new capacity largely offsets that off-line. An increase in Atlantic basin supply ahead of the seasonal improvement in demand could prolong the current setback in refining profitability. New complex Asian refineries are exerting additional pressure on the economics of less complex refineries in the Atlantic basin, e.g. by being able to buy cheaper feedstock than their European competitors. New Asian capacity has been added twice as fast as old Atlantic basin capacity has been shut down. Light ends: The light end of the barrel is currently the weakest. Instead of naphtha, the petrochemical industry is using cheaper propane as feedstock. Blending demand from the gasoline pool continues but is weaker than earlier this year. Demand for naphtha is slightly better in Asia. In spite of the recent correction in European gasoline, cracks remain relatively strong since the market is being supported by arbitrage cargoes going to the US and West Africa. US gasoline supply is currently satisfactory but this could change heading into the summer driving season. Middle distillates: Despite relatively weak demand European middle distillate markets are fairly tight and inventory levels low, the latter should however improve as refineries ramp up again following maintenance. Jet fuel demand remains seasonally low though stronger in Europe than elsewhere encouraging refiners to maximize production while minimizing diesel output. Recently, US distillate inventories have fallen well below normal seasonal levels, indicating an increasingly tight, and potentially supportive, US middle distillate market. Heavy ends: Like middle distillates heavier fractions of the barrel have recently corrected but with cracks rising rather than falling. Japanese nuclear power plant closures and maintenance elsewhere ensure equilibrium in an otherwise oversupplied Asian market. Seasonally, European low sulphur fuel oil demand is increasing while inventories remain limited.

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 J t fu l e 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
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

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 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

US refinery utilization
(%, weekly data)
9 1 2 0 -2 1 a g 0 7 0 1 v. 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 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) J t fu l p m m (rig t) e 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

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 -2 5 N ph a a th J t fu l e e L w su h fu l o o lp ur e il D se 1 pp ie l 0 m G so e a lin G so 0 % a il .1 H h su h r fu o ig lp u el il

low high sulphur 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

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

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

European Euro pean 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

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 a 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 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

70 0 60 5 60 0 50 5 50 0 40 5 40 0

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 ,5 5 1 ,3 5
9,5

US implied gasoline demand

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

1 ,0 5 1 ,8 4 1 ,5 4 1 ,3 4 1 ,0 4 1 ,8 3 1 ,5 3 j f m a m j j a s o n d 5 ag y v. 21 01 21 02
9,3

9,1 5 a g. y v 2 011 2 012

8,9

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 5,0 5y av g. 2011 2012

Gasoline arbitrage Rotterdam to New York

($/t, daily closing)
20 15 10 5 0

4,8 4,6 4,4 4,2

-5 -10 -15 -20

n v-1 o 1

fe -1 b 1

fe -1 b 2

-25

ja -1 n 2

ag 1 u -1

a r-1 p 2

d c-1 e 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

fe -1 b 2

-25

m r-1 a 2

a r-1 p 2

m r-1 a 1

Chart Sources: Bloomberg, SEB Commodity Research

m j-1 a 1

se -1 p 1

ag 1 u -1

d c-1 e 1

m j-1 a 2

o 1 kt-1

a r-1 p 1

ja -1 n 1

ju -1 n 1

ja -1 n 2

ju 1 l-1

m r-1 a 1

m r-1 a 2

m j-1 a 1

se -1 p 1

m j-1 a 2

ju -1 n 1

ja -1 n 1

a r-1 p 1

ju 1 l-1

o 1 kt-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

20 07

20 08

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

20 07

20 08

20 09

21 00

21 01

Chart Sources: Bloomberg, SEB Commodity Research

21 02

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

75

21 02

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 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 A S 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

10

21 02

SEB Oil Market Report

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Good faith & limitations

Opinions, projections and estimates contained in this report represent the authors present opinion and are subject to change without notice. Although information contained in this report has been compiled in good faith from sources believed to be reliable, no representation or warranty, expressed or implied, is made with respect to its correctness, completeness or accuracy of the contents, and the information is not to be relied upon as authoritative. To the extent permitted by law, SEB accepts no liability whatsoever for any direct or consequential loss arising from use of this document or its contents.

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
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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, SEBEI is a U.S. broker-dealer, registered with the Financial Industry Regulatory Authority (FINRA). SEBEI 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