CERI Commodity Report Crude Oil

Transcription

1 1-Jun-10 1-Jul-10 1-Aug-10 1-Sep-10 1-Oct-10 1-Nov-10 1-Dec-10 1-Jan-11 1-Feb-11 1-Mar-11 1-Apr-11 1-May-11 1-Jun-11 1-Jun-10 1-Jul-10 1-Aug-10 1-Sep-10 1-Oct-10 1-Nov-10 1-Dec-10 1-Jan-11 1-Feb-11 1-Mar-11 1-Apr-11 1-May-11 1-Jun-11 CERI Commodity Report Crude Oil June 2011 Diverging WTI and Brent Prices The difference between WTI and Brent oil prices has reached a new record level (see Figure 1). On June 13, 2011 the spread was at US$23.29/bbl (see Figure 2), the highest it has ever been in the last two decades. It has come down since, but it is still in the range of $20/bbl. This article will attempt to explain the reasons behind such a divergence. Brent oil originates from the North Sea, and as such is mostly exported to Europe, while WTI oil is based in Texas and southern Oklahoma, so its price pertains to the North America crude oil market. Therefore, it makes sense that there will be some differences between the two commodities prices, however, historically the gap between the two was the other way around with Brent oil being cheaper than WTI, given WTI is of higher quality, being lighter and slightly sweeter, which makes it easier and cheaper to turn into gasoline or diesel. The last time that Brent traded significantly above WTI was in May 2007 following a major refinery shutdown at Cushing. The spread then peaked at around US$8/bbl, well below current levels. Figure 1: Daily WTI and Brent Prices (US$/bbl) US$/bbl Source: EIA. WTI Brent Figure 2: Daily Brent-WTI Differential (US$/bbl) US$/bbl In order to understand this price behaviour, we will need to examine the main changes during 2011 when this spread reversed and started to widen. There exist several potential reasons as to why Brent is trading at a premium to WTI 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. WTI and Brent parted in their trends during the end of January, coinciding with the turmoil in the Middle East and North Africa. Since Brent oil is considered more related to the uncertainty in the Middle East than WTI (geography wise), the Middle East riots might be responsible for driving Brent oil prices up in the last few months. While this explanation has some merit, it is only part of the answer. For more information about CERI, please visit our website at

2 Jan-2004 Apr-2004 Jul-2004 Oct-2004 Jan-2005 Apr-2005 Jul-2005 Oct-2005 Jan-2006 Apr-2006 Jul-2006 Oct-2006 Jan-2007 Apr-2007 Jul-2007 Oct-2007 Jan-2008 Apr-2008 Jul-2008 Oct-2008 Jan-2009 Apr-2009 Jul-2009 Oct-2009 Jan-2010 Apr-2010 Jul-2010 Oct-2010 Jan-2011 Apr-2011 Page 2 Another suggested reason has to do with the underperformance of WTI that can partly be attributed to refining and capacity problems at the storage and pricing facility for WTI, located at Cushing, Oklahoma (i.e., PADD II or Midwest). The argument here is that the Midwest is oversupplied, and the crude oil cannot get down as far as the Gulf Coast. While there is pipeline capacity to the Midwest, there is not adequate take-away capacity to the Gulf Coast. Currently, the Midwest has total refining capacity of about 3.7 MMbpd. Imports in 2010 were about 1.4 MMbpd, and PADD II production stands at approximately 800,000 barrels a day (bpd), making a total of roughly 2.2 million barrels a day. Consumption of oil products in the Midwest is about 4.9 MMbpd, considerably more than it refines, so the Midwest also depends on imports of oil products from other parts of the country for its needs. There are two crude pipelines that connect the Midwest market to the Gulf region. The Seaway Pipeline, with a capacity of 430,000 bpd, brings oil up from the Gulf Coast to Cushing, and the Capline pipeline, with a capacity of 1.2 MMbpd, brings crude from Louisiana to Southern Illinois. The sum of crude oil coming from the North (Canada and North Dakota) with the crude oil coming from the South is causing the oversupply of crude oil to Midwest refineries. Another problem lies within the physical configuration of Midwest refineries. While some have been set up to process heavy oil from Canada, others have not. Because of this, even if the total amount of crude oil were to match up precisely with the available capacity, there might still be refineries with not enough crude and others with too much. These have led to a build up in stocks, which has depressed WTI prices. What s more, the delivery point at Cushing is landlocked, which makes it harder to shift these stocks around the world to take advantage of price differences elsewhere. depressed long enough, sellers will find other markets for their crude, and hence the market will correct itself. Another option is rail or truck transport from the Midwest to the Gulf, but arranging this may take some time due to the large quantities of crude involved. If this indeed worked, then the differential between Brent and WTI will be expected to narrow, reflecting the shipping costs involved. Some analysts do not agree with the theory of Cushing s supply glut being the reason behind the widening differential between Brent and WTI. They are arguing that the large spread is due to the US s other light sweet crude grade, Louisiana light sweet (LLS), which is not landlocked and can be shipped, being sought after abroad. Since LLS and Brent are of similar quality and both can be moved by tanker, the spread between LLS and Brent is mostly a reflection of shipping costs. The recent collapse of the differential to negative US$10/bbl (see Figure 3), indicating a premium for Brent, suggests that the light sweet crude is being directed away from the US Gulf Coast and toward Europe and Asia. In other words, the US is reducing its imports of light sweet crude. This arbitrage flip is only witnessed in the light sweet crude world, which means that while the US is reducing light sweet crude imports, it is still increasing its imports of heavier crude types. This reasoning then suggests that it is the Brent market s strength and not WTI market s weakness that is driving the WTI-Brent spread wider. Figure 3: Monthly LLS-Brent Differential US$/bbl A solution to this problem could arise from less oil brought up from the Gulf Coast. The direction of the Seaway pipeline could potentially be reversed, however, ConocoPhillips, a partial owner of the pipeline, has stated that it is not interested in reversing it. The company operates refineries in PADD II and profits if there is a large difference between crude prices and the selling prices of oil products (i.e., crack spread). Besides, if the price of crude remains CERI Commodity Report - Crude Oil

3 Page 3 References CAPP. Crude Oil: Forecasts, Markets and Pipelines. June Commodities Now. What explains the Brent-WTI spread? power-and-energy/6691-what-explains-the-brent-wti -spread.html. Accessed on July 7, Energy Information Agency. Weekly Petroleum Status Report. Oil Drum. Why are WTI and Brent Oil Prices so Different? Accessed on July 7, 2011.

4 Page 4 Spot Crude Oil Prices WTI - Edmonton Light Price Differentials US$/bbl US$/bbl WTI Brent Differential WTI Edmonton Light Jun-10 Aug-10 Oct-10 Dec-10 Feb-11 Apr-11 Jun Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Spot Prices WTI Brent Dubai Maya Year-to-Date Quarter-to-Date June 28, SOURCE: EIA. SOURCE: EIA. WTI - Hardisty Heavy Price Differentials N NYMEX Crude Forward Curve 12 months US$/bbl US$/bbl 140 Differential WTI Hardisty Heavy Apr May Jun Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun SOURCE: NRCan, EIA. SOURCE: EIA, CERI.

5 Page 5 NYMEX Petroleum Products CDN/US$ Exchange Rate US$/gal CDN/US$ 4.00 RBOB Gasoline Heating Oil Jun-10 Aug-10 Oct-10 Dec-10 Feb-11 Apr-11 Jun-11 NYMEX Prices Unleaded Gasoline Heating Oil Year-to-Date Quarter-to-Date June 28, Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Oil Demand Oil in Demand Selected Countries US Products Demand June June 2011 Y-on-Y change MMbpd % 49% % 4% 2% 0% 60 48% -2% % 30-4% -6% 20 46% -8% % 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 OECD Demand non-oecd Demand non-oecd Share of Global Demand -10% -12% Total Gasoline Jet Fuel Distillate Residual Propane Other SOURCE: IEA Oil Market Report. SOURCE: EIA Weekly Petroleum Status Report. SOURCE: EIA, CERI. SOURCE: NRCan. CERI Commodity Report - Crude Oil

6 SOURCE: IEA Oil Market Report, CERI. SOURCE: IEA Oil Market Report. SOURCE: IEA Oil Market Report. SOURCE: IEA Oil Market Report. Page 6 Oil Supply MMbpd Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 non-opec Supply OPEC Supply non-opec Share of Global Supply Canadian Oil Production by product Mbpd 4,000 3,500 3,000 2,500 2,000 1,500 1, Q10 1Q11 2Q11 3Q11 4Q11 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 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 4Q10 1Q11 2Q11 3Q11 4Q11 Alaska California Texas Federal GOM Other Lower 48 NGLs Other OECD Commercial Stocks by region Apr-08 Apr-09 Apr-10 Apr-11 OECD North America OECD Europe OECD Pacific

7 Page 7 MMb US Commercial Stocks May 27 - June, 2011 Crude Gasoline Distillate Products Total MMb Canadian Stocks on Land 1Q10 2Q10 3Q10 4Q10 1Q11 SOURCE: EIA Weekly Petroleum Status Report. SOURCE: IEA Oil Market Report. CERI Commodity Report - Crude Oil

8 Page 8 World Supply and Demand Balance (MMbpd) Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 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 Mar-11 Apr-11 May-11 Mar-11 Apr-11 May-11 Saudi Arabia Iran UAE Kuwait Qatar Nigeria Libya Algeria Ecuador OPEC Iraq Total OPEC WTI Price Projections ($US/barrel) Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 High Price Case Reference Case Low Price Case

9 Page 9 Data Appendix CERI Commodity Report - Crude Oil

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. 34.9% 32.9% 29.2% 26.8% Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Yr-on-Yr Chg. 44.7% 42.5% 34.0% 27.1% 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. 44.6% 44.4% 40.2% 38.2% 46.1% 46.4% 44.6% 40.7% Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Yr-on-Yr Chg. 56.0% 54.1% 47.0% 43.1% 54.3% 53.0% 44.7% 37.6% 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).

11 Page 11 A3: World Crude Oil Contract Prices (FOB, $US per barrel) Saudi U.A.E. Oman U.K. Norway Russia Venez. Colombia Ecuador Mexico Nigeria Indon. Arab Lgt Dubai Oman Brent Ekofisk Urals 1 T.J. Light C.Limon Oriente Isthmus Bonny Lgt Minas Q Q Q Q Q Yr-on-Yr Chg. 43.8% 38.1% 38.2% 45.8% 46.3% 45.7% 42.0% 40.9% 44.7% 42.0% 44.9% 39.9% Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Yr-on-Yr Chg. 44.9% 40.7% 40.5% 45.5% 44.9% 44.0% 39.3% 36.0% 35.5% 39.4% 44.2% 40.7% Notes: 1. Urals is Delivered price at Mediterranean. Contract prices are based on prices at the end of each month. Source: Weekly Petroleum Status 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. 42.1% 52.6% 56.4% 35.8% 38.4% 39.6% 35.8% 36.4% 40.2% 37.3% 44.3% 35.7% Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Yr-on-Yr Chg. 50.8% 45.2% 49.8% 30.7% 33.1% 34.1% 30.7% 30.6% 34.7% 33.8% 40.0% 30.6% 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. CERI Commodity Report - Crude Oil

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. 43.8% 41.6% 42.0% 48.5% 44.3% 35.7% 39.6% 38.4% Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Yr-on-Yr Chg. 44.9% 43.4% 39.4% 47.1% 40.0% 30.6% 34.1% 33.1% Notes: 1. Edmonton Light Sweet. 2. Hardisty Heavy. Based on contract prices at the end of each month. Sources: EIA Weekly Petroleum Status 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. 19.9% 38.1% 32.8% 36.2% 34.2% May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Yr-on-Yr Chg. 37.5% 52.4% 41.2% 50.6% 47.6% 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. Spot prices are average daily prices over a specific timeframe. Source: International Energy Agency (IEA) Oil Market Report.

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. 27.4% 37.8% 25.8% 26.2% 40.2% 26.1% 28.0% 40.4% 26.4% May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Yr-on-Yr Chg. 50.5% 44.7% 44.9% 48.4% 44.3% 44.0% 46.6% 44.0% 39.9% 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. 44.1% 45.1% 43.3% 45.1% 47.6% 43.8% 39.0% 45.8% Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Yr-on-Yr Chg. 40.1% 45.7% 44.5% 40.4% 47.8% 45.7% 26.5% 43.0% Notes: 1. Reformulated regular unleaded gasoline. Spot prices are based on average daily prices over a specific timeframe. Source: EIA Weekly Petroleum Status Report. CERI Commodity Report - Crude Oil

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.

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. 3.5% -9.3% -17.5% -0.2% 3.0% 2.0% 1.5% 2.0% 7.6% 2.2% 5.0% 2.7% May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Yr-on-Yr Chg. -0.6% -11.8% 0.0% -3.1% 0.4% -0.6% 1.8% 0.8% 8.2% -7.5% 2.8% 0.7% R/P Ratio 2 #REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF! 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 , ,432 2, , ,431 2, , ,422 2,664 1Q , ,399 2,677 2Q , ,020 1,447 2,762 3Q , ,467 2,742 4Q , ,422 2,664 1Q , ,373 2,633 Yr-on-Yr Chg. -1.0% -3.0% -1.6% -2.1% -0.5% -2.0% -2.9% -2.0% -0.7% -1.7% -1.9% -1.6% Apr , ,038 1,401 2,727 May , ,027 1,433 2,757 Jun , ,020 1,447 2,762 Jul , ,008 1,468 2,771 Aug , ,013 1,481 2,793 Sep , ,467 2,742 Oct , ,010 1,448 2,759 Nov , ,438 2,716 Dec , ,422 2,664 Jan , ,461 2,725 Feb , ,405 2,660 Mar , ,373 2,633 Apr , ,000 1,380 2,668 Yr-on-Yr Chg. 1.0% -5.8% -2.8% -9.7% 1.2% -3.5% -4.3% 7.3% 3.1% -3.6% -1.5% -2.2% 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. CERI Commodity Report - Crude Oil

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. 7.6% -2.2% 8.8% 3.3% 2.5% 13.0% 7.0% -26.1% 1.6% -16.1% #DIV/0! 2.3% 11.3% May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Yr-on-Yr Chg. 9.8% -3.2% 4.8% 6.1% 1.3% 9.3% 22.1% -93.5% 3.2% -12.3% 8.7% -0.1% 11.2% Quotas Over/Under % 7.8% 9.0% 9.9% 11.0% 23.6% 38.9% -93.2% 6.7% 3.3% 16.3% 6.6% 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. 0.5% 500.8% 0.5% -76.5% 1.5% -16.8% 0.7% Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr Yr-on-Yr Chg. -6.2% 70.7% -1.1% -107% -1.2% -50.6% -3.6% 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.

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. 3.0% 1.4% -6.6% 25.7% 1.0% 12.7% 0.6% Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr Yr-on-Yr Chg. 3.5% -1.6% -14.1% 4.5% -3.7% 11.1% -1.4% % of Total % 100.0% 1.2% 28.9% 22.1% 24.9% South-Central North-West West Supply Demand Balance Supply Demand Balance Supply Demand Balance Q Q Q Q Q Yr-on-Yr Chg. 1.3% 3.3% 6.7% 8.0% -7.0% -1.5% Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr Yr-on-Yr Chg. 2.4% -0.6% 3.9% 0.2% -2.8% 0.3% % of Total % 27.5% 7.9% 3.4% 15.1% 15.4% 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. CERI Commodity Report - Crude Oil

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. -0.6% -1.6% 4.1% 7.0% 1.0% 3.5% 1.4% Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr Yr-on-Yr Chg. -3.7% 4.3% -0.5% 3.8% -2.7% 12.8% -1.6% 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 , ,735 1, , ,776 1, , ,794 1, Q , ,779 1, Q , ,839 1, Q , ,857 1, Q , ,794 1, Q , ,770 1, Yr-on-Yr Chg. -9.2% 6.1% -1.0% 3.4% 2.2% -0.6% 0.7% -25.8% -4.5% 1.7% -8.5% -7.8% Apr , ,804 1, May , ,823 1, Jun , ,839 1, Jul , ,839 1, Aug , ,857 1, Sep , ,857 1, Oct , ,846 1, Nov , ,826 1, Dec , ,794 1, Jan , ,803 1, Feb , ,773 1, Mar , ,770 1, Apr , ,776 1, Yr-on-Yr Chg % 3.0% -1.2% 0.1% -0.1% -1.6% 0.8% -29.9% -12.9% -1.4% -9.9% -10.6% Notes: 1. Petroleum stocks include crude oil, finished products, NGLs, refinery feedstocks, additives/oxygenates and other hydrocarbons. 2. Includes approximately 685 million barrels of oil in the Strategic Petroleum Reserve. 3. Total includes other finished petroleum products. All stocks are closing levels for respective reporting period. Source: EIA Petroleum Supply Monthly.

19 Page 19 C4: US Petroleum Net Imports by Source (million barrels per day) Region of Origin Canada Mexico Lat. Am. Europe Africa M.E. Total 1 Venez. S. Arabia Nigeria Total 2 P. Gulf Q Q Q Q Q Yr-on-Yr Chg. 10.4% -11.2% -9.9% -68.5% -1.5% -4.0% -6.6% 3.0% 10.4% -0.7% -3.4% -5.2% Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr Yr-on-Yr Chg. 4.3% -43.0% -2.1% -57.9% -12.3% -15.4% -14.1% 2.6% -12.0% -17.4% -17.5% -17.1% % of Total % 5.1% 18.7% 2.3% 16.3% 19.7% 100.0% 11.0% 12.7% 10.4% 50.4% 19.3% Notes: 1. Total includes net-imports from Russia and Asia-Pacific region. 2. Total OPEC includes the other eight cartel members. 3. As of latest month. Source EIA Petroleum Supply Monthly. OPEC C5: US Regional Crude Oil Production (million barrels per day) PAD District U.S. Major Producers East Mid-West S-Cent N-West West Total Alaska Calif. 1 Louis. Texas G. of Mex Q Q Q Q Q Yr-on-Yr Chg. 19.0% 21.2% 2.3% 7.1% -3.7% 3.3% -5.9% -0.2% -3.8% 9.8% -2.2% Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Yr-on-Yr Chg. 29.1% 23.9% 1.3% 4.7% -3.1% 3.0% -6.6% 0.7% 2.9% 15.5% -7.9% R/P Ratio Notes: 1. California includes Federal Offshore crude oil production. 2. Gulf of Mexico includes Federal Offshore production adjacent to Texas and Louisiana. 3. Crude oil Reserve-Production ratio as of latest production month. Crude oil production does not include NGLs. Source: EIA Petroleum Supply Monthly. CERI Commodity Report - Crude Oil