CERI Commodity Report Crude Oil

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1 CERI Commodity Report Crude Oil July-August 2012 Oil Sands First CCS Project Carbon capture & storage (CCS) is critical to meeting the huge projected increase in global energy demand while reducing carbon dioxide (CO 2 ) emissions. If you want to achieve climate change goals, CCS has to be part of the solution. We are helping to advance CCS technology on a number of fronts around the world, but Quest will be our flagship project. Peter Voser, Chief Executive Officer, Royal Dutch Shell On September 5 th, Royal Dutch Shell announced that it will go ahead with the first carbon capture and storage (CCS) project for an oil sands operation in Canada. Quest is the world s first commercial-scale CCS project to tackle carbon emissions in the oil sands, and the first CCS project in which Shell will hold majority ownership and act as designer, builder and operator. Figure 1: Aerial View of Scotford Upgrader Source: Shell. CERI Commodity Report Crude Oil Editor-in-Chief: Dinara Millington (dmillington@ceri.ca) About CERI The Canadian Energy Research Institute is an independent, not-for-profit research establishment created through a partnership of industry, academia, and government in Our mission is to provide relevant, independent, objective economic research in energy and related environmental issues. We strive to build bridges between scholarship and policy, combining the insights of scientific research, economic analysis, and practical experience. In doing so, we broaden the knowledge of young researchers in areas related to energy, the economy, and the environment while honing their expertise in a range of analytical techniques. For more information about CERI, please visit our website at Shell will construct the Quest CCS project on behalf of the Athabasca Oil Sands Project joint venture owners, which are Shell Canada Energy (60 percent), Chevron Canada Limited (20 percent) and Marathon Oil Canada Corporation (20 percent). The Athabasca Oil Sands project produces bitumen, which is piped to Shell s Scotford Upgrader near Edmonton, Alberta. That facility processes roughly 250,000 barrels a day of bitumen, or heavy crude oil. Shell and its partners will then transport the captured CO 2 about 80 kilometers north via an underground pipeline for injection into a deep saline aquifer. Starting in late 2015, Quest will capture and store more than one million tonnes a year of CO 2 produced in bitumen processing. Quest will potentially reduce direct emissions from the Scotford Upgrader by up to 35 percent the equivalent of taking 175,000 North American cars off the road annually. The Quest project will cost $1.35 billion, of which $865 million will be funded by the Canadian and Alberta governments. The Alberta government allocated the project a $745 million share of the province s $2 billion CCS fund, while Ottawa will provide $120 million through its Clean Energy Fund. The other two projects being funded by the provincial government are Swan Hills Synfuels and the Alberta Carbon Trunk Line, but both are further behind Shell in terms of planning. To further entice Shell to proceed, last year the Alberta government said it would temporarily give Quest double the amount of credits on the province's carbon offset program for each ton of CO 2 stored. With offset prices currently at $15 per ton of CO 2 and accounting for Quest s one million tonnes of CO 2 buried per year, that could help earn the project $30 million over 10 years. Shell plans to start construction this fall and adopt a construction method widely used in the oil sands industry of doing as much work as possible offsite with modules being pre-assembled and delivered to the Scotford Upgrader via Alberta s heavy load highway corridor. We re looking to use some of the offshore [construction] techniques, where the space is limited, but height may not be as big of a deal, Quest Project Manager Anita Spence said in a supporting video Relevant Independent Objective

2 Page 2 released by Shell in early September. Ms. Spence said that assembling offsite would be more cost effective and lead to a more controlled construction environment. This year the company is planning to prep the Scotford site and to drill injection and monitoring wells in order to start collecting additional field data. The module and pipeline construction should begin early next year, with construction continuing through fall 2014 before plant commissioning and start-up. The project will employ an average of about 400 skilled trades workers over roughly 30 months, peaking at about 700. Shell s Quest project is the first project to demonstrate CCS technology in an oil sands application but most of the individual component parts have been tested and proven to be working safely and reliably over the years. The three component technologies of CCS are: CO 2 extraction from process gas streams; pipeline transportation, and; injection of CO 2 into a deep geological formation. Shell s patented ADIP-X amine-based capture technology has been a worldwide gas processing industry standard for extracting hydrogen sulphide and CO 2 from natural gas for more than 40 years. Capture facilities will use an amine solvent to capture the CO 2 from the process stream. Adjusting the amine process to preferentially recover 98 percent pure CO 2 from the upgrader s hydrogen manufacturing units is the only new aspect of the Quest carbon capture unit. 1 The CO 2 is released from the amine by heating and then it is dehydrated and compressed. The compression reduces its volume by about 400 times turning it into a very dense fluid. The liquid CO 2 will be transported by an underground pipeline to between three to eight injection wells located north of the upgrader. CO 2 has been transported by pipelines in large volumes since 1972, for use in enhanced oil recovery (EOR) from declining oil fields, mostly in Texas. The longest, largestcapacity pipeline in the world was originally built in 1983 and was operated by Shell, moving CO km from McElmo Dome reservoir in Colorado to the Wassan oilfield in Texas. Today, the US Energy Information Administration says 105 projects in the US safely inject more than 50 million tonnes of CO 2 per year into oil formations to produce 90 million barrels of oil per year. Shell s Quest CO 2 storage formation is not connected to an oil or gas reservoir. Rather, Quest is designed to utilize the storage capabilities of the very deep Basal Cambrian Sandstone (BCS) formation that underlies large parts of Alberta, Saskatchewan and the Northern Plains in the US. The BCS is considered ideal for CO 2 storage at the chosen location because of: i) its more than 2-km depth and multiple overlying layers of impermeable rock formations that act as regional seals; ii) lack of hydrocarbons or other resources that would conflict with its use as a CO 2 storage reservoir; and iii) the fact that historically it has been penetrated by very few wells. Demonstrating the capacity and capability of this formation for high-volume permanent CO 2 storage is important for the CCS projects that will be required in the future to help governments achieve their CO 2 reduction targets. Quest will be the first CCS project in North America to inject commercial-scale volumes of CO 2 into the BCS after being the first project in Alberta to receive the rights to inject CO 2 into pore space under new provincial CCS legislation enacted in To minimize corrosion in either the pipeline or the injection wells that can be caused by water associated with the CO 2, Shell will set up a dehydration unit at Scotford to remove water content from the CO 2 stream. As further protection against corrosion, the bottom sections of tubing within CO 2 injection wells will be chrome steel. The materials selected for the pipeline were also based on their suitability for CO 2 transport, and the pipeline will be made from low-temperature carbon steel material with specific toughness requirements. In 2011, Quest also underwent a comprehensive thirdparty expert audit of its storage development plan and received the world s first certificate of fitness for its storage development plan from Det Norske Veritas (DNV) of Norway, an international risk management firm. A large challenge ahead would be to cut down CCS costs in order to provide energy that is both affordable and environmentally-friendly (i.e., has low CO 2 emissions). This becomes even more important in the oil sands where projects already carry a high cost profile. As Len Heckel, Shell Canada s Quest venture manager put it: Reducing CCS costs will be vital to keeping the oil sands and Alberta competitive. CERI Commodity Report - Crude Oil

3 Page 3 In the environmental arena, the International Energy Agency (IEA) calls CCS a crucial part of worldwide efforts to limit global warming and estimates that it could potentially reduce worldwide emissions by one-fifth by According to the Global CCS Institute, 2 15 projects are currently operating or in construction phase worldwide, capturing 35.4 million tonnes of CO 2 annually. A further 58 large-scale integrated projects are in the planning stages, which would add more than 115 million tonnes per year of capture capacity, the institute said in its most recent update in June. John Abbott, Shell s Executive Vice-President, heavy oil, said CCS could play a large role in helping Canada achieve its goal of reducing greenhouse gas emissions 17 percent below 2005 levels by the end of the decade while also still allowing for the development of fossil fuel sources like the oil sands. As well, the knowledge Quest will provide will help enable much wider and more cost-effective application of CCS through the energy industry and other sectors in years to come. Shell is also working with governments and experts to help the development of CCS in other countries, including projects in Norway and Australia. Both the federal and Alberta provincial governments have identified CCS as an important tool in their respective strategies to reduce CO2 emissions, but critics have complained that the technology is prohibitively expensive without public support. Some environmental groups criticized the level of government spending on the project, equating it to a handout to a large oil company, saying that the money could be better spent on renewable energy sources. Endnotes 1 The Scotford upgrading process adds hydrogen to the heavy oil to break it down into synthetic crude oil, which can then be processed into products like gasoline. Producing this hydrogen produces one of the largest sources of CO 2 emissions from the upgrader. 2 References Canadian Press. Shell moves ahead with first oilsands carbon capture project. September 5, Accessed on September 21, 2012 GHG Monitor. Shell Canada gives final green light to Quest CCS project. Accessed on September 24, 2012 Global CCS Institute. Status of CCS Project Database. Accessed on September 24, 2012 Petroleum Economist. Shell moves ahead with Canadian CCS project. September Shell News and Media Releases. CCS technologies show long, safe history. upstream/oil_sands/quest/technology/. Accessed on September 21, 2012 Shell News and Media Releases. Shell to construct world s first oil sands CCS project. content/can-en/aboutshell/media_centre/ news_and_media_releases/2012/0905quest.html. Accessed on September 21, 2012 YouTube. Quest Project Manager Anita Spence and the concept of modularization. v=xcsr4zfhqow. Accessed on September 24, 2012 Relevant Independent Objective

4 Page 4 US$/bbl Differential WTI Brent Spot Crude Prices US$/bbl US$/bbl WTI - Edmonton Light Price Differentials Differential WTI Edmonton Light Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep Aug-06 Aug-07 Aug-08 Aug-09 Aug-10 Aug-11 Aug-12 Spot Prices WTI Brent Edm.Light H.Hardisty Year-to-Date Quarter-to-Date September 18, SOURCE: EIA. SOURCE: EIA. US$/bbl 160 WTI - Hardisty Heavy Price Differentials US$/bbl 110 NYMEX Crude Forward Curve 12 months 140 Differential WTI Hardisty Heavy Sep Jul Aug Aug-06 Aug-07 Aug-08 Aug-09 Aug-10 Aug-11 Aug-12 SOURCE: NRCan, EIA. SOURCE: EIA, CERI. CERI Commodity Report - Crude Oil

5 SOURCE: EIA, CERI. SOURCE: NRCan. Page 5 NYMEX Petroleum Products CDN/US$ Exchange Rate US$/gal 4.00 CDN/US$ RBOB Gasoline Heating Oil Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep Aug-06 Aug-07 Aug-08 Aug-09 Aug-10 Aug-11 Aug-12 NYMEX Prices Unleaded Gasoline Heating Oil Year-to-Date Quarter-to-Date September 18, Oil Demand Global in Selected Oil Demand Countries US Products Demand August August 2012 Y-on-Y change MMbpd % % 35% 90 30% 80 48% 70 25% 20% 60 15% 50 47% 10% 40 5% % 45% 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 0% -5% -10% -15% Total Gasoline Jet Fuel Distillate Residual Propane Other OECD Demand non-oecd Demand non-oecd Share of Global Demand SOURCE: IEA Oil Market Report. SOURCE: EIA Weekly Petroleum Status Report. Relevant Independent Objective

6 SOURCE: IEA Oil Market Report, CERI. SOURCE: IEA Oil Market Report. SOURCE: IEA Oil Market Report. SOURCE: IEA Oil Market Report. Page 6 Global Oil Supply MMbpd Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 non-opec Supply OPEC Supply non-opec Share of Global Supply Canadian Oil Production by product Mbpd 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, Q12 2Q12 3Q12 4Q12 1Q13 AB L/M/H AB Bitumen SK Other NGLs Synthetic 61.0% 60.5% 60.0% 59.5% 59.0% 58.5% 58.0% 57.5% 57.0% Mbpd 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Mbpd 3,000 2,500 2,000 1,500 1, US Oil Production by region 1Q12 2Q12 3Q12 4Q12 1Q13 Alaska California Texas Federal GOM Other Lower 48 NGLs Other OECD Commercial Stocks by region Jul-09 Jul-10 Jul-11 Jul-12 OECD North America OECD Europe OECD Pacific CERI Commodity Report - Crude Oil

7 Page 7 MMb US Commercial Stocks July 27, August 31, 2012 Crude Gasoline Distillate Products Total MMb Canadian Stocks on Land 2Q11 3Q11 4Q11 1Q12 2Q12 SOURCE: EIA Weekly Petroleum Status Report. SOURCE: IEA Oil Market Report. Relevant Independent Objective

8 Page 8 World Supply and Demand Balance (MMbpd) Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 World Demand OECD non-oecd World Supply Non-OPEC OPEC NGLs OPEC Crude Supply - Demand OECD Stocks (MMbbls) Days Cover OPEC Crude Oil Production (MMbpd) Sustainable Production Over (+)/Under (-) Target Capacity Jun-12 Jul-12 Aug-12 Jun-12 Jul-12 Aug-12 Saudi Arabia Iran UAE Kuwait Qatar Nigeria Libya Algeria Ecuador OPEC Iraq Total OPEC WTI Price Projections ($US/barrel) Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 High Price Case Reference Case Low Price Case CERI Commodity Report - Crude Oil

9 Page 9 Data Appendix Relevant Independent Objective

10 Page 10 A1: Historic Light Sweet Crude Futures Prices ($US per barrel) NYMEX Light Sweet Crude Last 3 Day Avg. When 12-Month Spread Close Average Near Mo. Strip Avg. (1-2 Mo.) Q Q Q Q Q Yr-on-Yr Chg. -1.1% -1.5% -7.9% -7.7% Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Yr-on-Yr Chg. 17.5% 14.4% 1.5% 1.3% A2: Historic Crude Product Futures Prices ( US per gallon) NYMEX Unleaded Gasoline NYMEX Heating Oil Last 3 Day Avg. When 12-Month Spread Last 3 Day Avg. When 12-Month Spread Close Average Near Mo. Strip Avg. (1-2 Mo.) Close Average Near Mo. Strip Avg. (1-2 Mo.) Q Q Q Q Q Yr-on-Yr Chg. -4.7% -4.6% -4.7% -8.7% -4.4% -4.6% -5.8% -6.3% Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Yr-on-Yr Chg. 2.4% 4.0% 5.6% 2.7% 3.0% 2.8% 3.5% 3.2% Notes (Tables A1 and A2): Prices are listed by contract month. Close: final contract close on the last day of trading. Last 3 Day Average Close: simple average contract close on last three days of trading. Average When Near Month: simple average closing price on trading days when contract was near month. 12-Month Strip Average: simple average of daily near 12-month contract closing prices in a given contract month. Spread: difference between one-month and two-month forward prices in a given period. Source: New York Mercantile Exchange (NYMEX). CERI Commodity Report - Crude Oil

11 Page 11 A3: World Crude Oil Contract Prices (FOB, $US per barrel) Saudi U.A.E. Oman U.K. Norway Russia Venez. Kuwait Ecuador Mexico Nigeria Indon. Arab Lgt Dubai Oman Brent Ekofisk Urals 1 T.J. Light Blend Oriente Isthmus Bonny Lgt Minas Q Q Q Q Q Yr-on-Yr Chg. -4.1% -3.3% -3.6% -7.0% -7.8% -5.8% -6.4% -3.0% -2.2% -4.6% -6.7% -1.7% Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Yr-on-Yr Chg % -11.2% -11.2% -15.0% -15.8% -14.3% -12.6% -11.4% -6.4% -10.9% -14.7% -8.9% Notes: 1. Urals is Delivered price at Mediterranean. Contract prices are based on prices at the end of each month. Source: OPEC Monthly Oil Market Report. A4: North American Posted Crude Prices (FOB, $US per barrel) United States Canada ANS 1 Lost Hills Kern R. WTI WTS GCS Okla. Sw. Kans. Sw. Mich. So. Wyo. Sw. ELS 2 HH Q Q Q Q Q Yr-on-Yr Chg. 7.9% -8.0% -6.3% -10.2% -10.8% -11.0% -10.2% -10.3% -11.2% -12.0% -18.5% -15.6% Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Yr-on-Yr Chg % -1.5% 1.3% 12.0% 12.8% 13.2% 12.0% 12.2% 13.3% 11.3% -1.9% -0.3% Notes: 1. ANS is Delivered price on US West Coast. 2. Edmonton Light Sweet. 3. Hardisty Heavy. Posted prices are based on price at the end of each month. Sources: Oil & Gas Journal; Natural Resources Canada. Relevant Independent Objective

12 Page 12 A5: Crude Oil Quality Differentials (FOB, $US per barrel) Light vs. Heavy Sweet vs. Sour Arab Lt Arab Hv Diff. Isthmus Maya Diff. ELS 1 HH 2 Diff. GCS WTS Diff Q Q Q Q Q Yr-on-Yr Chg. -4.1% -1.2% -4.6% -2.9% -22.0% -19.2% -11.0% -10.8% Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Yr-on-Yr Chg % -9.1% -10.9% -9.9% -21.5% -17.5% -14.2% -13.9% Notes: 1. Edmonton Light Sweet. 2. Hardisty Heavy. Based on contract prices at the end of each month. Sources: OPEC Monthly Oil Market Report: Oil & Gas Journal; Natural Resources Canada. A6: Crude Oil Spot Prices and Differentials (FOB, $US per barrel) Spot Prices Differentials WTI Brent Dubai Urals Basket 1 WTI-Brent WTI-Dubai WTI-Urals WTI-Basket Q Q Q Q Q Yr-on-Yr Chg. -8.8% -7.4% -4.1% -6.4% -1.1% Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Yr-on-Yr Chg. 9.1% 2.7% 3.4% 4.0% 3.0% Notes: 1. OPEC-Reference Basket is average price of seven crude streams: Algeria Saharan Blend, Dubai Fateh, Indonesia Minas, Mexico Isthmus, Nigeria Bonny Light, Saudi Arabia Light and Venezuela Tia Juana Light. Source: OPEC Monthly Oil Market Report. CERI Commodity Report - Crude Oil

13 Page 13 A7: World Petroleum Product Spot Prices ($US per barrel) NY Harbor, Barges Rotterdam, Barges Singapore, Cargoes Gasoline 1 No. 2 H.O. Resid. 2 Gasoline 1 Gasoil Resid. 3 Gasoline 1 Gasoil Resid Q Q Q Q Q Yr-on-Yr Chg. -5.2% -0.4% 13.3% -2.5% -3.3% 0.1% -3.8% 11.9% 0.5% Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Yr-on-Yr Chg. 7.5% -19.4% 17.4% 5.2% 3.9% 0.9% 3.7% 6.2% 1.5% Notes: 1. Regular unleaded gasoline. 2. High Sulfur (3.0%) Residual Fuel Oil. 3. High Sulfur (3.5%) Residual Fuel Oil. Spot prices are based on average daily prices over a specific timeframe. Source: IEA Oil Market Report. A8: Product Spot Prices in Selected American Cities ( US per gallon) NY Harbor US Gulf Los Angeles Gasoline 1 No. 2 H.O. Distill. Gasoline 1 Jet Fuel Distill. Gasoline 1 Distill Q Q Q Q Q Yr-on-Yr Chg. -3.9% -4.8% -4.5% -6.2% -5.5% -4.5% -1.9% -7.1% Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Yr-on-Yr Chg. 6.6% 3.4% 5.6% 6.0% 4.9% 5.7% 10.2% 8.5% Notes: 1. Reformulated regular unleaded gasoline. Spot prices are based on average daily prices over a specific timeframe. Source: EIA Weekly Petroleum Status Report. Relevant Independent Objective

14 Page 14 B1: World Petroleum Supply and Demand Balance (million barrels per day) OECD Non-OECD OPEC World N. A. Europe Asia-Pac Total 1 Asia Non-Asia FSU Total 1 P. Gulf Non-Gulf Total 2 Total 3 Demand Q Q Q Q Q Q Q Q Q Supply Q Q Q Q Q Q Q Q Q Balance Q Q Q Q Q Q Q Q Q Notes: 1. Totals for OECD and non-oecd supply include net refining gains; specific regions/groupings within each do not. 2. OPEC demand is an estimate based on historical annual data. 3. Balance for World equals global stockbuilds (+) and stockdraws (-) for crude oil and petroleum products and miscellaneous gains and losses. Regional surpluses (+) and deficits (-) are balanced through net-imports and stock changes in the short-term, and net-imports in the longer term. Supply includes crude oil, condensates, NGLs, oil from non-conventional sources and processing gains. Demand is for petroleum products. Source: IEA Oil Market Report. CERI Commodity Report - Crude Oil

15 Page 15 B2: World Petroleum Production (million barrels per day) OECD Non-OECD OPEC World N. A. Europe Asia-Pac Total Asia Non-Asia FSU Total P. Gulf Non-Gulf Total Total Q Q Q Q Q Yr-on-Yr Chg. 9.2% -5.8% 8.0% 6.0% 0.1% -4.9% 0.3% -1.2% 4.7% 12.8% 7.5% 4.1% Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Yr-on-Yr Chg. 6.9% -11.2% 1.9% 3.4% 0.5% -5.7% -1.0% -1.9% 1.1% 15.6% 5.2% 2.3% R/P Ratio Notes: 1. Production includes crude oil, condensates and NGLs. 2. Reserve-Production ratio is based on latest month production and British Petroleum reserve estimates. Sources: IEA Oil Market Report and BP Statistical Review of World Energy. B3: OECD Commercial Petroleum Stocks (million barrels) North America Europe Asia-Pacific OECD Crude Product Total Crude Product Total Crude Product Total Crude Product 1 Total , ,431 2, , ,422 2, , ,408 2,601 2Q , ,397 2,676 3Q , ,427 2,665 4Q , ,408 2,601 1Q , ,388 2,659 2Q , ,011 1,375 2,704 Yr-on-Yr Chg. 4.8% -1.6% 1.8% -0.4% -1.2% -0.6% 6.8% -2.5% 2.0% 3.4% -1.6% 1.0% Jul , ,436 2,698 Aug , ,443 2,700 Sep , ,427 2,665 Oct , ,406 2,643 Nov , ,414 2,654 Dec , ,408 2,601 Jan , ,430 2,652 Feb , ,388 2,629 Mar , ,388 2,659 Apr , ,379 2,681 May , ,007 1,374 2,698 Jun , ,011 1,375 2,704 Jul , ,407 2,714 Yr-on-Yr Chg. 6.2% -3.0% 1.0% -0.3% -0.7% -0.2% 2.7% -1.8% 1.1% 3.5% -2.0% 0.6% Notes: 1. Product includes only finished petroleum products. 2. Total stocks include NGLs, refinery feedstocks, additives/oxygenates and other hydrocarbons. All stocks are closing levels for respective reporting period. Source: IEA Oil Market Report. Relevant Independent Objective

16 Page 16 B4: OPEC Crude Oil Production and Targets (million barrels per day) Persian Gulf Non-Persian Gulf OPEC-11 OPEC-11 Arabia Iran UAE Kuwait Qatar Venez. Nigeria Libya Algeria Angola Ecuador Total 1 Target Iraq Q Q Q Q Q Yr-on-Yr Chg. 9.5% -14.0% 6.9% 12.5% -9.8% -2.3% -3.6% ##### -7.9% 13.5% -4.0% 7.4% 9.4% Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Yr-on-Yr Chg. 1.0% -18.8% 6.3% 9.1% -8.5% -2.0% -0.9% #DIV/0! -7.8% 3.6% 2.0% 3.8% 14.6% Quotas Over/Under % -14.7% 21.2% 24.3% 2.7% 23.6% 35.3% -6.1% -1.7% 15.1% 16.3% 14.6% Notes: 1. Does not include NGLs; OPEC production targets apply to crude oil only. 2. Iraq does not have an official OPEC target. 3. OPEC-10 production targets. 4. As of latest month. Source: IEA Oil Market Report. B5: OECD Refinery Activity Crude Input (MMbpd) - Utilization (percent) - Refining Margins ($US/barrel) North America Europe Asia-Pacific OECD Input Util. Margin 1 Input Util. Margin 2 Input Util. Margin 3 Input Util Q Q Q Q Q Yr-on-Yr Chg. 3.7% % -0.1% % 4.7% -55.5% 2.6% Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Yr-on-Yr Chg. 2.1% % 2.2% 1014% 6.0% % 2.8% Notes: 1. Based on dated Brent being processed in average US Gulf cracking refinery. 2. Based on dated Brent in average Rotterdam cracking refinery. 3. Based on spot Dubai in average Singapore hydroskimming refinery. Source: IEA Oil Market Report. CERI Commodity Report - Crude Oil

17 Page 17 C1: US Petroleum Supply and Demand Balance (million barrels per day) United States 1 East Mid-West Supply Demand Net-Imp. Stk. Chg. Supply Demand Balance Supply Demand Balance Q Q Q Q Q Yr-on-Yr Chg. 8.6% -0.6% -12.7% 10.3% 0.7% 18.6% 2.0% Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Yr-on-Yr Chg. 8.7% -1.9% -10.9% 8.2% -1.5% 18.0% -0.7% % of Total % 100.0% 1.4% 27.9% 24.2% 25.9% South-Central North-West West Supply Demand Balance Supply Demand Balance Supply Demand Balance Q Q Q Q Q Yr-on-Yr Chg. 8.3% -3.9% 8.3% 2.1% -4.9% -2.0% Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Yr-on-Yr Chg. 8.6% -4.8% 6.3% -2.2% -4.3% 0.9% % of Total % 27.0% 7.9% 3.8% 12.6% 15.5% Notes: 1. Does not balance because of unaccounted for crude oil. Regional surpluses (+) and deficits (-) are balanced through net-imports/transfers and stock changes in the short-term, and net-imports/transfers in the longer term. 2. As of most recent month. Supply includes crude oil, condensates, NGLs, oil from nonconventional sources and processing gains. Demand is for petroleum products. Source: EIA Petroleum Supply Monthly. Relevant Independent Objective

18 Page 18 C2: US Petroleum Demand by Product (million barrels per day) Finished Petroleum Products NGLs Petroleum Gasoline Jet Fuel Distil. Resid. Total 1 Total Total Q Q Q Q Q Yr-on-Yr Chg. 1.0% -2.5% -1.1% -30.7% -1.3% 4.2% -0.6% Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Yr-on-Yr Chg. -0.1% 0.0% -4.5% -21.0% -2.4% -0.1% -1.9% Notes: 1. Total includes other finished petroleum products. 2. Total petroleum demand includes refinery feedstocks, additives/oxygenates and other hydrocarbons. Source: EIA Petroleum Supply Monthly. C3: US Petroleum Stocks (million barrels) Petroleum Stocks 1 Crude Oil Finished Products East Mid-West S-Cent N-West West U.S. Total 2 Gasoline Jet Fuel Distil. Resid. Total , ,776 1, , ,794 1, , ,751 1, Q , ,808 1, Q , ,781 1, Q , ,751 1, Q , ,777 1, Q , ,808 1, Yr-on-Yr Chg % 6.8% 0.5% 4.6% -2.0% 0.0% -0.3% -7.2% -9.0% -16.5% -1.2% -10.3% Jun , ,808 1, Jul , ,820 1, Aug , ,801 1, Sep , ,781 1, Oct , ,770 1, Nov , ,772 1, Dec , ,751 1, Jan , ,771 1, Feb , ,764 1, Mar , ,777 1, Apr , ,776 1, May , ,794 1, Jun , ,808 1, Yr-on-Yr Chg % 6.8% 0.5% 4.6% -2.0% 0.0% -0.3% -7.2% -9.0% -16.5% -1.2% -10.3% Notes: 1. Petroleum stocks include crude oil, finished products, NGLs, refinery feedstocks, additives/oxygenates and other hydrocarbons. 2. Includes Strategic Petroleum Reserves. 3. Total includes other finished petroleum products. All stocks are closing levels for respective reporting period. Source: EIA Petroleum Supply Monthly. CERI Commodity Report - Crude Oil