CERI Commodity Report Crude Oil

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1 Well Count CERI Commodity Report Crude Oil July 2011 CERI Study Sees a Turnaround in Conventional Oil Production It is a fact that when it comes to Canada s oil industry, high oil prices coupled with somewhat robust global demand for oil during the past several years have fueled a huge expansion of Alberta s oil sands industry. However, conventional 1 crude oil production is making a comeback in Western Canada. Oil production from the Western Canada Sedimentary Basin (WCSB) has been declining since the early 1970s after reaching a peak production of approximately 2 million barrels per day (MMBPD). Over the past ten years the production rate has continued to decline, dropping from 1.2 MMBPD in 2001 to 0.9 MMBPD in After more than a decade of lower conventional crude oil production in Western Canada, output is expected to increase over the next five years based partly on the perception of an increasing oil market price and partly on the attraction of increased production rates from horizontal well developments. 3 Figure 1 depicts CERI s realistic case for drilling for conventional oil in British Columbia, Alberta and Saskatchewan. This forecast assumes that the drilling for oil will continue to grow year over year for the next 5 years and will plateau by 2016 and decline after that by 2.5 percent per year for Alberta and Saskatchewan. The relationship between vertical wells and horizontal wells 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. will continue to change in the future in favour of drilling more horizontal wells. The rate of change is assumed to be 5 percent per year in areas that are currently displaying less than 35 percent horizontal wells and 20 percent per year in areas that currently display more than 35 percent horizontal wells. 4 Figure 1: Drilling Forecast by Province and Well Type 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Forecast AB Conventional Vertical Wells BC Conventional Vertical Wells SK Conventional Vertical Wells AB D&A Wells SK D&A Wells AB Conventional Horizontal Wells BC Conventional Horizontal Wells SK Conventional Horizontal Wells BC D&A Wells Based on the drilling forecast presented in Figure 1 and accounting for the decline curves, initial production rates, and changing relationship between drilling vertical and horizontal wells, Figure 2 represents the resulting oil production forecast for the WCSB broken down by province. Also included on this chart is the conventional oil forecast published by the Canadian Association of Petroleum Producers (CAPP) in June The production is expected to grow from 0.9 MMBPD in 2010 to just over 1.1 MMBPD by 2016 and slowly decline afterwards. In the later years ( ) of this forecast, the production volume from Alberta declines at a slower rate as compared to Saskatchewan. The reason for this is the initial production rates from producing areas in central Alberta are significantly larger than areas in central west and northwest Saskatchewan and in southeast Saskatchewan. For more information about CERI, please visit our website at

2 Production Rate (bbls/day) Page 2 Figure 2: CERI Production Projections (Realistic Case) 1,400,000 1,200,000 1,000, , , , ,000 Given the production forecast, CERI also calculated the economic impacts of conventional oil developments, both existing and future drilling of new wells in the province of Alberta and the associated impacts on the North American economies. The impacts are calculated both for Canada and the United States, with Canadian impacts examined at the provincial level and the US impacts broken down to the PADD level. The impacts under consideration are Gross Domestic Product (GDP), employee compensation, employment, tax and royalty implications. These impacts cover all upstream activities (geological and geophysical, drilling, completion and tie-in, and operation of existing wells (as of December 2009) and new wells as defined by the CERI Realistic Case. The economic benefits include: 0 British Columbia Conventional Crude Alberta Conventional Crude Saskatchewan Manitoba Northwest Territories CAPP Forecast 1,400,000 1,200,000 1,000, , , , ,000 Over the period the estimated investments, reinvestments, and revenues from operation of the existing and future conventional oil developments in western Canada are $1,059 billion. Total Canadian GDP impact as a result of the investment shocks is estimated at close to $1,034 billion over the 25-year period. 0 Canadian employee compensation will reach almost $256 billion over this time period. Employment in Canada (direct, indirect, and induced) is expected to grow from 148,000 jobs to a peak of 225,000 jobs in Alberta royalties are expected to grow from $0.75 billion in 2010 to a peak of $4.7 billion in British Columbia royalties are expected to grow from $0.06 billion in 2010 to a peak of $0.075 billion over the study period. Saskatchewan royalties are expected to grow from $1.1 billion in 2010 to a peak of $1.7 billion in US GDP impact from , as a result of the investment shocks, is estimated at close to CAD$98 billion. US employee compensation will exceed $46 billion over the period. US employment totals are expected to grow from 32,000 jobs to a peak of 48,000 jobs in Endnotes 1 The term conventional crude oil refers to light, medium and heavy hydrocarbons. Conventional crude oil is produced by drilling wells. It is differentiated from nonconventional crude oil by the method used for extraction. 2 Production for the WCSB is made up of light, medium and heavy crudes produced in the provinces of Alberta, British Columbia, Saskatchewan, Manitoba and the Northwest Territories. Alberta and Saskatchewan make up 94 percent of the 2009 production. 3 CERI internal estimate. 4 Ibid. 5 CAPP, Crude Oil, Forecast, Markets and Pipelines. June CERI Commodity Report - Crude Oil

3 Page 3 Spot Crude Oil Prices WTI - Edmonton Light Price Differentials US$/bbl US$/bbl WTI Brent Differential WTI Edmonton Light J J J J J J J A A A A A A A A S S S S S S S O O N N N N N N N D D D D D D D J J J J J J J F F F F F F M A A A A A A M M J J J J J J J J J J J J Jul-05 Jul-06 Jul-07 Jul-08 Jul-09 Jul-10 Jul-11 Spot Prices WTI Brent Dubai Maya Year-to-Date Quarter-to-Date August 2, SOURCE: EIA. SOURCE: EIA. WTI - Hardisty Heavy Price Differentials NYMEX Crude Forward Curve 12 months US$/bbl 160 Differential WTI Hardisty Heavy 140 US$/bbl May Jun Jul Jul-05 Jul-06 Jul-07 Jul-08 Jul-09 Jul-10 Jul-11 SOURCE: NRCan, EIA. SOURCE: EIA, CERI.

4 Page 4 NYMEX Petroleum Products CDN/US$ Exchange Rate US$/gal CDN/US$ 4.00 RBOB Gasoline Heating Oil J J J J J J J A A A A A A A A S S S S S S S O O N N N N N N N D D D D D D D J J J J J J J F F F F F F M M A A A A A A M J J J J J J J J J J J J J J NYMEX Prices Unleaded Gasoline Heating Oil Year-to-Date Quarter-to-Date August 2, Jul-05 Jul-06 Jul-07 Jul-08 Jul-09 Jul-10 Jul-11 Oil Demand Oil in Demand Selected Countries US Products Demand July July 2011 Y-on-Y change MMbpd % % 4% 90 2% 80 49% 0% 70-2% % 47% 46% 45% 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 OECD Demand non-oecd Demand non-oecd Share of Global Demand -4% -6% -8% -10% -12% -14% -16% -18% 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

5 SOURCE: IEA Oil Market Report, CERI. SOURCE: IEA Oil Market Report. SOURCE: IEA Oil Market Report. SOURCE: IEA Oil Market Report. Page 5 Oil Supply MMbpd Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 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, Q11 2Q11 3Q11 4Q11 1Q12 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 1Q11 2Q11 3Q11 4Q11 1Q12 Alaska California Texas Federal GOM Other Lower 48 NGLs Other OECD Commercial Stocks by region May-08 May-09 May-10 May-11 OECD North America OECD Europe OECD Pacific

6 Page 6 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

7 Page 7 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 Apr-11 May-11 Jun-11 Apr-11 May-11 Jun-11 Saudi Arabia Iran UAE Kuwait Qatar Nigeria Libya Algeria Ecuador OPEC Iraq Total OPEC WTI Price Projections ($US/barrel) Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 High Price Case Reference Case Low Price Case

8 Page 8 Data Appendix CERI Commodity Report - Crude Oil

9 Page 9 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% Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Yr-on-Yr Chg. 25.9% 26.4% 25.7% 23.8% 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% Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Yr-on-Yr Chg. 47.8% 49.6% 50.3% 50.1% 51.6% 52.8% 53.3% 48.8% 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).

10 Page 10 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% Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Yr-on-Yr Chg. 54.6% 52.1% 52.1% 51.6% 53.7% 54.4% 45.4% 47.9% 51.7% 45.5% 53.5% 63.7% 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% 51.9% 55.6% 35.0% 37.5% 38.7% 35.0% 35.3% 39.3% 36.4% 45.3% 36.5% Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Yr-on-Yr Chg. 53.6% 39.6% 40.1% 22.2% 23.8% 24.5% 22.2% 22.9% 24.8% 25.8% 39.2% 29.4% 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

11 Page 11 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% 45.3% 36.5% 38.7% 37.5% Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Yr-on-Yr Chg. 54.6% 54.3% 45.5% 52.2% 39.2% 29.4% 24.5% 23.8% 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. 31.4% 49.6% 41.7% 48.0% 46.6% Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Yr-on-Yr Chg. 27.8% 52.4% 45.7% 50.2% 49.5% 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.

12 Page 12 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. 44.6% 44.9% 45.7% 42.6% 43.7% 43.9% 42.8% 45.4% 42.3% Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Yr-on-Yr Chg. 41.3% 45.8% 51.6% 42.9% 44.2% 49.3% 44.5% 47.0% 48.3% 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. 44.4% 45.2% 43.4% 45.5% 47.7% 43.9% 39.1% 46.1% Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Yr-on-Yr Chg. 51.4% 55.0% 53.4% 50.8% 55.1% 52.6% 29.2% 48.1% 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

13 Page 13 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.

14 Page 14 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. 1.0% -6.7% -9.7% -1.0% 0.0% -0.5% 0.6% 0.1% 9.9% -8.4% 3.5% 1.3% Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Yr-on-Yr Chg. 0.1% 2.9% -7.9% 0.3% -2.2% 0.4% -0.1% -0.5% 12.8% -8.8% 5.3% 2.1% 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 , ,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 , ,374 2,633 Yr-on-Yr Chg. -0.9% -3.0% -1.6% -2.3% -0.5% -2.0% -3.0% -2.0% -0.8% -1.7% -1.8% -1.6% 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 , ,374 2,633 Apr , ,377 2,656 May , ,399 2,680 Yr-on-Yr Chg. 1.6% -4.9% -2.1% -12.5% -0.4% -5.3% -1.6% 1.3% 0.9% -3.9% -2.4% -2.8% 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

15 Page 15 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. 11.4% -2.7% 7.8% 6.3% 3.8% 12.1% 14.8% -92.3% 1.6% -14.4% #DIV/0! 0.4% 13.6% Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Yr-on-Yr Chg. 17.6% -2.7% 9.2% 7.8% 5.1% 13.5% 15.2% -94.9% 0.8% -15.7% 11.1% 2.5% 15.7% Quotas Over/Under % 9.3% 12.6% 12.2% 12.3% 27.1% 36.5% -94.6% 5.0% -1.3% 16.3% 9.9% 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% May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Yr-on-Yr Chg. -4.8% 33.6% -0.1% -63% -2.1% -29.2% -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.

16 Page 16 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% May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Yr-on-Yr Chg. 4.3% -2.5% -7.2% 28.2% -5.1% 11.2% -3.2% % of Total % 100.0% 1.4% 27.3% 22.1% 25.1% 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% May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Yr-on-Yr Chg. 2.3% 1.6% 6.0% 8.0% -0.8% -5.8% % of Total % 28.7% 8.0% 3.6% 14.4% 15.3% 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

17 Page 17 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% May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Yr-on-Yr Chg. -4.7% 0.5% 0.6% -7.0% -3.0% 7.2% -2.5% 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% 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, May , ,805 1, Yr-on-Yr Chg % 0.9% -0.2% -2.5% 2.7% -1.0% 1.0% -24.3% -7.3% -3.7% -19.1% -10.7% 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.

18 Page 18 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% May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Yr-on-Yr Chg. -5.4% -34.8% 1.8% -22.1% -19.6% 8.7% -7.2% -10.2% 8.8% -17.2% -9.2% 5.4% % of Total % 7.8% 17.2% 3.0% 14.6% 20.7% 100.0% 10.9% 13.2% 9.2% 49.4% 20.1% 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. 22.8% 26.8% 7.5% 4.8% -9.5% 5.3% -16.5% -0.2% 4.6% 12.5% -7.1% Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Yr-on-Yr Chg. 42.4% 27.0% 1.4% 6.8% -14.5% 0.9% -27.6% -1.0% 12.5% 17.0% -8.3% 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