SG - Oil Driver 8May13

7/28/2019 SG - Oil Driver 8May13

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Please see disclaimer and disclosures at the end of this document

COMMODITIES06 May 2013

Important Notice: The circumstances in which this publication has been produced are such that it is not appropriate to characterise it as independentinvestment research as referred to in MiFID and that it should be treated as a marketing communication even if it contains a research recommendation.This publication is also not subject to any prohibition on dealing ahead of the dissemination of investment research. However, SG is required to havepolicies to manage the conflicts which may arise in the production of its research, including preventing dealing ahead of investment research.

Weekly Extract from a report

Oil Drivers June Atlantic Basin sweet crude supply and demand should tighten vs. May. The result of this should be that, as we progress through May and trade June barrels,

physical fundamentals should exert upward pressure on the front of the Brent

forward curve.

Oil market scoreboard (see full scoreboard on next page)

Bear Bull

MARKET FUNDAMENTALS Demand is holding its own, but the Saudis need to keep an eye on OPEC supply creeping up.

MARKET SIGNALS Technicals, managed money, and refining margins are all neutral. But geopolitics is bullish.

NEAR-TERM DIRECTION Neutral. But gradually more bullish as May progresses, on seasonally higher crude buying.

Source: SG Cross Asset Research

Summary

A macro tug of war for oil prices is taking place. The data flow for the US, China, and Europe continues to be mixed to bearish,

but the central banks (the Fed and ECB) are demonstrating their intention to keep easing and providing liquidity for the markets.

There is more upside than downside for Brent, due to the strong seasonality of global refinery crude runs.

There is more downside than upside for WTI. After the Longhorn pipeline start-up, the Whiting refinery restart (which is mainly

about sour crude, not sweet crude), and a small increment from the Permian Express pipeline in Q2, there are no more

significant pipeline start-ups scheduled until December 2013. In the meantime, the relentless growth in US supply will, once

again, exert downward pressure on WTI vs. LLS and Brent.

Atlantic Basin sweet crude (Mb/d) tightening in June vs. May 3 month price history

Last price Minimum MaximumICE Brent 102.77 97.69 118.90

NymexWTI 93.93 86.68 97.77

ICE Gasoil 847.00 822.75 1030.75

Nymex Gasoline 277.31 271.90 320.35

Nymex Heating Oil 285.24 273.46 323.84

Forecasts vs forward priceQ2 13 vs. fwd Q3 13 vs. fwd Q413 vs. fwd

ICE Brent 109.0 6% 113.7 12% 112.3 11%

Nymex WTI 91.5 -2% 98.7 5% 99.8 7%

ICE Gasoil 931 10% 966 14% 964 14%

Nymex Gasoline 301 8% 294 10% 273 2%

Nymex Heating oil 307 7% 306 7% 303 6%

Source: Reuters, IEA, trade press, SG Cross Asset Research Source: SG Cross Asset Research, Date of price forecasts : 20 March 2013

May June May Jun

Supply (loadings) vs. Apr vs. May

North Sea 1.93 1.93 -0.04 0.00

Nigeria 2.00 1.85 0.26 -0.15

Angola 1.83 1.66 0.07 -0.17

Total 5.76 5.44 0.29 -0.32

Demand

OECD Americas crude runs 18.20 18.50 0.40 0.30

OECD Europe crude runs 11.50 11.60 -0.10 0.10

West Af rica to Asia f low s 1.87 1.87 0.06 0.00

North Sea to Asia flow s 0.00 0.00 0.00 0.00

North Sea to US flow s 0.07 0.00 0.00 -0.07

Total 31.64 31.97 0.36 0.34

supply change - demand change -0.07 -0.66

Michael Wittner(1) 212 278 64 [email protected]

This document is being provided for the exclusive use of TOON SUKRIT (UOB KAY HIAN PTE LTD)


2/16

Oil Drivers Scoreboardwxcw

06 May 2013 2

Scoreboard

Oil market scoreboard

Bear Bull

MARKET FUNDAMENTALS Demand is holding its own, but the Saudis need to keep an eye on OPEC supply creeping up.

Demand US Feb final demand - 100 kb/d y-o-y. Jan-Apr est. + 60 kb/d y-o-y, in line with expectations.

Economic outlook Opposing forces. Macro data continues mixed to bearish for the US, Europe and China. However, thisis being offset by ongoing liquidity/easing: the US Fed shifted to a neutral stance and the ECB cut rates.

Seasonality Demand for crude oil and refined products increases seasonally in May.

Weather Not currently a factor for the oil markets.

Supply OPEC creeping up. Saudis may need to trim or hold steady; either way, exports would be lower.

OPEC production Reuters: OPEC crude in April at 30.46 Mb/d (+ 280 kb/d m-o-m). Saudi supply flat, with gains due toIraq, Iran, and Libya. Naimi said Saudis have no plans to hike production capacity and would be luckyto see output over 9 Mb/d by 2020.

Refinery runs Global rebound in refinery runs in June (+1.1 Mb/d m-o-m) and July (+0.9 Mb/d m-o-m).

Freight and arbitrages Europe to US: crude closed, but gasoline open. US to Europe: heating oil closed.

Stocks May will be a key month for Cushing and WTI. Cushing is flat this year, but May draws expected.

US DOE expectations For this week, we forecast - 0.2 Mb for crude; + 1.5 Mb for gasoline; and - 0.6 Mb for distillate.

US PADD 2 & 3 crude stocks PADD 2, Cushing, and PADD 3 above/near 5y highs. Cushing stocks expected to draw this month.

US/Europe/Japan stocks End-Mar stocks: crude high in US, tight in Eur, av in Japan. Gasoil/diesel tight in US/Eur, av in Japan.

MARKET SIGNALS Technicals, managed money, and refining margins are all neutral. But geopolitics is bullish.

Market momentum Technicals changed from bearish to neutral. Managed money is neutral for WTI.

Hedge funds' net position WTI + 12k to 194k. RBOB - 3k to 37k. HO + 1k to - 17k. Neutral for WTI; bullish for RBOB and HO.

Implied probability In the latest snapshot, the skew for Brent crude options is slightly bullish. We score it broadly neutral.

Technical analysis Neutral for Brent, as prices for the June 13 contract are nearing channel resistance at $104.70/105.00.

Market sentiment Refining margins have stabilized and geopolitical risk is higher, due to Syria and Iraq.

Refining margins Global cracking margins stabilizing at 5 y av. Strong in US, but weak in Europe and Asia.

Geopolitical outlook

Sharp escalation of Shiite/Alawite vs. Sunni fighting in Syria and Iraq last week. After Assad apparentlyused chemical weapons, the US is thinking about arming rebels in Syria and discussing airstrikes withEuropean allies. Israel conducted 2 airstrikes on Syria on Fri and Sun, including a strike on Iranianmissiles intended for Hezbollah. Israel is sending a message to Iran/Hezbollah on the nuclear issue.

Forecasters' surveys Bloomberg: of 34 analysts surveyed on WTI, 12 were bullish, 16 were bearish, and 6 were neutral.

NEAR-TERM DIRECTION Neutral. But gradually more bullish as May progresses, on seasonally higher crude buying.

Source: SG Cross Asset Research



3/16

Oil Drivers Editorialwxcw

06 May 2013 3

Editorial

Crude oil prices have tentatively bottomed out and started to

recover

Since the low points of mid-April, crude prices have rebounded by $8, with front-month ICE

Brent currently trading around $105.50 and NYMEX WTI around $95.75. The WTI vs. Brent

differential is around $9.50, compared to $11 in mid-April; it narrowed to under $9 in recent

days, but has fallen back slightly.

Key product cracks versus Brent have eroded over the same time frame, with ICE gasoil

falling from $12-13 to $10-11, NYMEX heating oil dropping from $18 to $17, and NYMEX

RBOB easing from $15.50 to $14.50. Residual fuel oil cracks have strengthened, due to

seasonally lower refinery runs. Overall refining margins remain relatively strong in the US and

weak in Europe and Asia, but the key message for refining margins is that they appear to have

stabilized. The tighter product balances that result from refinery maintenance season have

finally had an impact.

A macro tug of war for oil prices: bearish data can be bullish

sometimes

Coming back to crude oil, after two months where the macro data was mixed to bearish,

helping to push down prices, the markets are now seeing an opposing force, which is that

central banks are clearly demonstrating their intention to keep easing and to keep providing

liquidity for the markets. Both forces can be seen just in the last two weeks. Two weeks ago,

the forward-looking PMIs for the US, Europe, and China all came in below expectations,

showing decelerating growth. Last week, the Fed shifted to a neutral stance and the ECB cut

rates. In addition, the key US non-farm payrolls report for April was solid, and was

accompanied by significant upward revisions for the previous two months.

In a sense, the opposing macro forces are simply the latest revival of an award-winning

Broadway play that weve seen before. Sometimes bearish macro data can be bearish, if the

market focuses on what it means for oil fundamentals; sometimes bearish macro data can be

bullish, if the market focuses on the central bank reaction, which is more cheap and easy

liquidity. Stepping back, this tug of war has been one of the reasons behind the recent

increase in crude price volatility and the recent increase in the importance of risk appetite

swings for oil price formation. Our view is that this is likely to continue, at least until the state

of the global economy becomes more clear to the markets. We believe that the global

economy will be stronger in H2 13 than in H1 13.

Focus on Brent: June Atlantic Basin sweet crude tighter than

May, which should be gradually bullish in the coming weeks

In the last Oil Drivers report, we suggested that the strong seasonality in global refinery crude

runs, which increase by 2.8 Mb/d between April and July, would ultimately put a floor under

prices and then cause them to rebound. However, we cautioned that the key drivers of

Atlantic Basin sweet crude supply and demand did not show any tightening in May vs. April,

so there would not be any uplift in April, at least not driven by fundamentals. (May barrels

trade in April.)

We still believe in the power of refinery crude buying. And now, two weeks later, a preliminarylook at the June vs. May Atlantic Basin sweet crude drivers does show significant tightening,

to the tune of 660 kb/d. The table is shown on the first page of this report. On the supply side,



4/16


06 May 2013 4

the loadings programs for Nigeria and Angola show a decrease of 320 kb/d in June. On the

demand side, US and European crude runs are expected to increase by 340 kb/d.

The data is still partial. We do not have figures for North Sea loadings (expected in the next 7-

10 days); however, oilfield maintenance starts in the North Sea in June and we do know, for

example, that Ekofisk loadings will be down, due to downtime in that system. We

conservatively assume flat North Sea supply in June vs. May, but it is likely to be lower.

Similarly, on the demand side, we do not have figures for West Africa to Asia flows. Again, we

conservatively assume steady flows in June vs. May, but with refinery demand picking up in

Asia, the pull on West African crude is likely to be higher, not lower. As a result, at this point,

it is hard for us to see a scenario where June Atlantic Basin sweet crude does not tighten

significantly vs. May. We reiterate our view that as we progress through May, we should see

fundamentally-driven upward pressure on the front of the Brent forward curve.

What could work against this fundamental pressure? In a word: non-fundamentals. As

discussed above, risk appetite has returned to the oil markets as a bullish factor. In addition,

the recent sharp escalation in the fighting in Syria and Iraq, underscored by the Israeli

airstrikes on Syria, has increased the geopolitical risk premium in the oil markets (see

Scoreboard). If risk appetite swings the other way or geopolitical risk cools off, there could be

bearish non-fundamental price pressure to offset bullish fundamentals pressure.

In addition, we have to mention that many in the market are very aware that in the each of the

last three years, selling in May has been a very good idea. Weve had a lot of questions on

this from clients, and we have two answers. First: this is not analysis, merely observation of

a pattern. Second: we do believe in a springtime correction but this year, it has happened

already. Regardless, the worry is out there, and it may be enough to at least cause buyers to

be reluctant or hesitant, even if the fundamentals firm up as we expect.

US product demand +60 kb/d y-o-y in Jan-Apr, right in line with our expectations

Source: US EIA, SG Cross Asset Research

Focus on WTI: markets focused right now... and not looking

ahead to bearish pressures when supply will outpace pipelines

As noted above, WTI has continued to strengthen vs. LLS and Brent. There have been a

couple of good reasons for this. First, the Longhorn pipeline from the West Texas Permian

Basin to the USGC started up two weeks ago, with initial flows at 75 kb/d through May, then

18.0

18.5

19.0

19.5

20.0

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Mb/d

2011 2012 2013



5/16


06 May 2013 5

ramping up to 225 kb/d in Q3. This crude has, until now, gone to Cushing; by going to the

USGC instead, it is tightening up the storage hub.

Another factor behind the strength in WTI was that in the last 7-14 days, there have been

reports that flows on the 180 kb/d BP1 pipeline from Cushing to the BP refinery at Whiting,

Indiana have resumed, at up to 150 kb/d. The 405 kb/d refinery has been down since last

November for a major upgrade on the crude distillation unit. The CDU upgrade is meant to lift

the capacity of the refinery to run inexpensive heavy sour Canadian crude from 80 kb/d to 350

kb/d. Though BP continues to say that the project is on track for a H2 start-up, wire service

reports today indicated that the start-up may take place as soon as end-May or, more likely,

June. As the refinery ramps up, a process which will probably take some time, crude demand

will increase. Most of the incremental demand will be for heavy sour Canadian, not light sweet

US midcontinent crude. However, doing the simple arithmetic, Whiting will still run up to 55

kb/d of light sweet, if it is at capacity. This is a significant increment. Recent flows of up to

150 kb/d may have been to rebuild stocks at the plant; we also note that the proportion of

sweet vs. sour in recent flows is not known. Indeed, Cushing holds both types of crude, and

while we do know Cushing stocks, the proportion of sweet vs. sour stocks is also not known.

In contrast to Brent, where we are bullish for the coming months, our outlook for WTI is neutral

to bearish. We continue to believe that WTI has narrowed too far and too fast vs. LLS and

Brent. The market does not appear to be looking ahead to the fact that after Longhorn,

Whiting, and a small increment from the first phase 90 kb/d Permian Express, scheduled for

this quarter, there are no more significant pipeline start-ups scheduled until December, when

the 700 kb/d Keystone Marketlink line is due onstream (former Keystone XL southern leg). In

the meantime, the relentless US supply growth of around 1 Mb/d annually will continue, which

should put downward pressure on WTI once again. The wildcard, and a bit of an unknown, is

rail capacity growth from the Cushing area to the USGC. Even here, we note that rail

transportation costs on this route are around $10/bbl. WTI cannot really narrow further vs.

LLS or rail flows will be uneconomic and this crude will start to pile up at Cushing. As supply

pressures resume, we expect WTI vs. Brent to widen out again to $10-15 in Q3 13.

US product demand flat to slightly higher vs. last year, as

expected

Finally, while we are on the subject of the US, we note that US product demand has been

unspectacular but resilient, as shown on the chart on the previous page. The final monthly

data for February show total demand of 18.7 Mb/d, a 100 kb/d y-o-y contraction. Ouradjusted estimates (weekly data minus the 3-month average of weekly to monthly revisions)

for March and April show demand of 18.4 Mb/d (+160 kb/d) and 18.1 Mb/d (-185 kb/d).

Looking at the last three months, gasoline demand has been down compared to a year ago;

distillate demand (road diesel plus heating oil) has been flat; and the growth continues to

come from propane and other relatively cheap products derived from natural gas. All told, for

the first four months of the year, average growth has been 60 kb/d, which is right in line with

our forecasts for 2013 as a whole. In our last report, we said that we did not see any cyclical

or structural weakness in Chinese demand. Here, we can say the same thing for US demand.

We reiterate our view that, aside from underperforming Europe, the fundamental demand

weakness seen in recent months has been seasonal and temporary, not cyclical or structural.



6/16

Oil Drivers Crude Oil Prices & Curveswxcw

06 May 2013 6

CrudeOil Prices & Curves

World crude oil benchmarks (USD/b) Brent - Dubai spread (USD/b)

Source: NYMEX, ICE, Platts & SG Cross Asset Research Source: ICE, Platts & SG Cross Asset Research

ICE Brent forward curve (USD/b) NYMEX WTI forward curve (USD/b)

Source: ICE & SG Cross Asset Research Source: NYMEX & SG Cross Asset Research

ICE Brent implied volatility curve (%) ICE Brent implied probability indicator (front month)

Source: SG Cross Asset Research Source: SG Cross Asset Research

$ 70

$ 80

$ 90

$ 100

$ 110

$ 120

$ 130

Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13

WTI Brent Dubai

-$ 1

$ 0

$ 1

$ 2

$ 3

$ 4

$ 5

$ 6


$ 90

$ 94

$ 98

$ 102

$ 106

$ 110

$ 114

Jun-13 Dec-13 Jun-14 Dec -14 Jun-15 Dec-15

latest last w eek last month

$ 82

$ 86

$ 90

$ 94

$ 98

Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15

latest last w eek last month

16%

17%

18%

19%

20%

21%

22%

JUN13 DEC13 JUN14 DEC14 JUN15 DEC15

Latest Last w eek Last Month

0%

10%

20%

30%

40%

50% This Week Last Week



7/16

Oil Drivers Refined Products Priceswxcw

06 May 2013 7

Refined Products Prices

NYMEX RBOB price (USD/g) NYMEX RBOB crack (USD/b)

Source: NYMEX & SG Cross Asset Research Source: NYMEX & SG Cross Asset Research

NYMEX Heating oil price (USD/g) NYMEX Heating oil crack (USD/b)

Source: NYMEX & SG Cross Asset Research Source: NYMEX & SG Cross Asset Research

ICE Gasoil price (USD/t) ICE Gasoil crack (USD/b)

Source: ICE & SG Cross Asset Research Source: ICE & SG Cross Asset Research

$ 2.50

$ 2.70

$ 2.90

$ 3.10

$ 3.30

$ 3.50


$ 10

$ 15

$ 20

$ 25

$ 30

$ 35

$ 40

$ 45

$ 50


$ 2.50

$ 2.70

$ 2.90

$ 3.10

$ 3.30

$ 3.50


$ 10

$ 15

$ 20

$ 25

$ 30

$ 35

$ 40

$ 45

$ 50


$ 800

$ 850

$ 900

$ 950

$1 000

$1 050


$ 8

$ 12

$ 16

$ 20

$ 24




8/16

Oil Drivers Freight Rates & Arbitrageswxcw

06 May 2013 8

Freight Rates& Arbitrages

Crude oil: Europe to US net arbitrage (USD/b) Gasoline: Europe to US net arbitrage (USD/b)

Source: Platts & SG Cross Asset Research Source: Platts & SG Cross Asset Research

Heating oil: US to Europe net arbitrage (USD/b) Fuel oil: Europe to Singapore net arbitrage (USD/b)

Source: Platts & SG Cross Asset Research Source: Bloomberg & SG Cross Asset Research

Freight cost for crude oil main routes (USD/b) Rotterdam to New York clean tanker freight TC2 (USD/b)

Source: Reuters & SG Cross Asset Research Source: Bloomberg & SG Cross Asset Research

-$ 30

-$ 25

-$ 20

-$ 15

-$ 10

-$ 5


Paper Crude Arb Phys ical Crude Arb

-$ 20

-$ 15

-$ 10

-$ 5

$ 0

$ 5

$ 10

$ 15

$ 20


-$ 11

-$ 9

-$ 7

-$ 5

-$ 3

-$ 1

$ 1


-$ 4

-$ 2

$ 0

$ 2

$ 4

$ 6

$ 8


$ 1.00

$ 1.50

$ 2.00

$ 2.50

$ 3.00


ME - Japan 260k ME - R'dam 280k Ras Tanura - USGC 280k

$ 1.6

$ 2.0

$ 2.4

$ 2.8

$ 3.2$ 3.6

$ 4.0




9/16

Oil Drivers Refining Marginswxcw

06 May 2013 9

Refining Margins

US LLS cracking margins (USD/b - 5-days m a) Rotterdam Brent cracking margins (USD/b - 5-days m.a)

Source: Bloomberg & SG Cross Asset Research Source: Bloomberg & SG Cross Asset Research

Med. Urals cracking margins (USD/b - 5-days m.a) Singapore Dubai cracking margins (USD/b - 5-days m.a)


Singapore Dubai topping margins (USD/b - 5 days m.a.) World cracking margins (USD/b - 5-days m.a)

Source: Bloomberg & SG Cross Asset Research Source: SG Cross Asset Research

-5

0

5

10

15

20

25

30


08 to 12 2012 2013 08-12 av.

-5

0

5

10

15


08 to 12 2012 2013 08-12 av.

-10

-5

0

5

10

15

20

Jan Feb Mar Apr May Jun Jul A ug Sep Oct Nov Dec

08 to 12 2012 2013 08-12 av.

-2

0

2

4

6

8

10


08 to 12 2012 2013 08-12 av.

-4

-2

0

2

4

6

8


08 to 12 2012 2013 08-12 av.

-5

0

5

10

15


08 to 12 2012 2013 08-12 av.



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Oil Drivers NYMEX Managed Money & Open Interestwxcw

06 May 2013 10

NYMEX Managed Money& OpenInterest

Managed money net position on NYMEX Crude oil (Mb) Managed money net position on NYMEX RBOB (Mb)

Source: US CFTC, NYMEX & SG Cross Asset Research Source: US CFTC, NYMEX & SG Cross Asset Research

Managed money net position on NYMEX Heating oil (Mb) Managed money net position on NYMEX Crude & Products(Mb)

Source: US CFTC, NYMEX & SG Cross Asset Research Source: US CFTC, NYMEX & SG Cross Asset Research

Managed money share in crude total open interest (%) Total Open Interest on Nymex WTI (Mb)

Source: US CFTC, NYMEX & SG Cross Asset Research Source: NYMEX & SG Cross Asset Research

60

65

70

75

80

85

90

95

100

105

110

0

50

100

150

200

250

300


USD/bk lots

Mngd money net pos. on WTI (Mb)

WTI (NYMEX)

1.9

2.3

2.7

3.1

3.5

0

20

40

60

80

100

120


USD/galk lots

Mngd money net pos. on RBOB (Mb)

RBOB (NYMEX)

1.8

2.2

2.6

3.0

3.4

-20

-10

0

10

20

30

40

50

60


k lots USD/galMngd money net pos. on HO (Mb)HO (NYMEX)

$ 65

$ 75

$ 85

$ 95

$ 105

$ 115

0

50

100150

200

250

300

350

400

450


USD/bk lotsMngd money net pos. on Crude & ProductsWTI (NYMEX)

18%

20%

22%

24%

26%

28%

30%


Managed money Share in WTI Open Interest

0

400

800

1200

1600

2000


M1 to M3 M4 to M12 M13+



11/16

Oil Drivers SG US DOE Expectationswxcw

06 May 2013 11

SGUS DOE Expectations

SG US DOE Forecasts US commercial crude stocks (Mb)

Assumptions Crude Gasoline Distillate

Input to CDU (Mbd) 15.10 na na

Yields (%) na 59.0% 29.5%

Production (Mbd) 7.32 8.91 4.45

Imports (Mbd) 7.55 0.75 0.15

Exports (Mbd) 0.04 0.49 1.00

Deliveries (Mbd) na 8.65 3.70

Build/(Draw) Mb -0.2 1.5 -0.6

Stocks Level This week Last week Last year

Crude Oil (Mb) 395.1 395.3 379.5

Gasoline (Mb) 217.4 216.0 207.1

Distillate (Mb) 115.2 115.8 120.8

SPR (Mb) 696.0 696.0 696.0

Source: US DOE Weekly & SG Cross Asset Research

US gasoline stocks (Mb) US distillate stocks (Mb)

Source: US DOE Weekly & SG Cross Asset Research Source: US DOE Weekly & SG Cross Asset Research

Product stocks (days supply cover) Cushing crude stocks vs WTI 1st - 2nd timespread

Source: US DOE Weekly & SG Cross Asset Research Source: US DOE Weekly, NYMEX & SG Cross Asset Research

280

300

320

340

360

380

400

420


08 to 12 2012 2013 08-12 av.

175

185

195

205

215

225

235

245


08 to 12 2012 2013 08-12 av.

100

110

120

130

140

150

160

170

180


08 to 12 2012 2013 08-12 av.

30

35

40

45


08 to 12 2012 2013 08-12 av.

-$ 0.9

-$ 0.7

-$ 0.5

-$ 0.3

-$ 0.1

$ 0.1

$ 0.3

0

10

20

30

40

50

60


US$/bMb Cushing crude stocks (LHS)WTI 1st-2nd nearby (RHS)



12/16

Oil Drivers Stocks in ARA & Singaporewxcw

06 May 2013 12

StocksinARA &Singapore

Gasoline stocks in ARA (Mb) Gasoil stocks in ARA (Mb)

Source: PJK International Limited & SG Cross Asset Research Source: PJK International Limited & SG Cross Asset Research

Jet kerosene stocks in ARA (Mb) Residual fuel oil stocks in ARA (Mb)

Source: PJK International Limited & SG Cross Asset Research Source: PJK International Limited & SG Cross Asset Research

Jet kerosene & gasoil stocks in Singapore (Mb) Residual fuel oil stocks in Singapore (Mb)


3

4

5

6

7

8

9

10


08 to 12 2012 2013 08-12 av.

7

9

11

13

15

17

19

21

23


08 to 12 2012 2013 08-12 av.

0

1

2

3

4

5

6

7

8


08 to 12 2012 2013 08-12 av.

2

3

4

5

6

7

8


08 to 12 2012 2013 08-12 av.

4

6

8

10

12

1416

18


08 to 12 2012 2013 08-12 av.

12

14

16

18

20

2224

26


08 to 12 2012 2013 08-12 av.



13/16

Oil Drivers Stocks in Japanwxcw

06 May 2013 13

StocksinJapan

Japan crude stocks (Mb) Japan gasoline stocks (Mb)

Source: Petroleum Association of Japan, SG Cross Asset Research Source: Petroleum Association of Japan, SG Cross Asset Research

Japan diesel & gasoil stocks (Mb) Japan jet kerosene stocks (Mb)


Japan residual fuel oil stocks (Mb) Japan unfinished products stocks (Mb)


85

90

95

100

105

110

115

120


08 to 12 2012 2013 08-12 av.

11

12

13

14

15

16

17


08 to 12 2012 2013 08-12 av.

8

10

12

14

16


08 to 12 2012 2013 08-12 av.

10

15

20

25

30

35


08 to 12 2012 2013 08-12 av.

17

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21

23

25

27

29


08 to 12 2012 2013 08-12 av.

40

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50

55

60

65


08 to 12 2012 2013 08-12 av.



14/16

Oil Drivers SG Price Forecasts - 20/03/13wxcw

06 May 2013 14

SGPriceForecasts-20/03/13SG Supply/Demand ForecastsMb/d 2010 2011 1Q 12 2Q 12 3Q 12 4Q 12 2012 1Q 13f 2Q 13f 3Q 13f 4Q 13f 2013fOECD demand 46.2 46.4 46.3 45.5 45.9 46.3 46.0 46.1 45.0 45.7 46.3 45.8Non-OECD demand 42.2 42.4 42.6 43.7 44.3 44.7 43.8 44.0 45.0 45.7 46.0 45.2World demand 88.4 88.8 88.9 89.2 90.2 91.0 89.8 90.1 90.0 91.4 92.3 91.0*Non-OPEC supply 52.6 52.8 53.4 52.8 53.0 54.2 53.4 54.3 54.4 54.3 55.2 54.5*OPEC NGLs 5.3 5.8 6.0 6.1 6.3 6.3 6.2 6.3 6.3 6.4 6.4 6.3*OPEC crude 29.3 29.9 31.3 31.7 31.5 30.9 31.4 30.3 30.0 31.0 30.8 30.5World supply 87.2 88.4 90.8 90.6 90.7 91.4 90.9 90.8 90.7 91.7 92.3 91.4Stock change -1.1 -0.4 1.8 1.4 0.5 0.4 1.0 0.6 0.7 0.4 0.0 0.4WTI NYMEX ($/bbl) 79.61 95.11 102.93 93.49 92.10 88.18 94.18 93.72 91.50 98.67 99.83 95.93Brent ICE ($/bbl) 80.34 110.90 118.35 108.90 109.24 110.08 111.64 113.13 109.00 113.67 112.33 112.03Source: Historical data IEA. Forecasts SG Cross Asset Research. Note: IEA historical data is based on the monthly Oil Market Report dated 20 March 2013.Non-OPEC supply includes processing gains and biofuels

SG Europe Price Forecasts2011 1Q 12 2Q 12 3Q 12 4Q 12 2012 1Q 13f 2Q 13f 3Q 13f 4Q 13f 2013f

Brent ICE US$/b 110.9 118.4 108.9 109.2 110.1 111.6 113.1 109.0 113.7 112.3 112.0Gasoil IPE US$/t 933.0 992.7 925.4 945.7 948.8 953.2 969.8 931.3 966.0 963.5 957.6Gasoline NWE FOB Barge US$/t 985.1 1062.1 1030.9 1064.3 988.3 1036.4 1056.8 1032.1 1037.8 1000.9 1031.9Naphtha CIF NWE Physical US$/t 931.2 1015.4 878.7 908.3 941.3 935.9 958.9 901.0 940.7 963.3 941.0Jet Fuel NWE CIF Cargo US$/t 1015.1 1060.2 993.8 1023.9 1025.8 1025.9 1052.2 1001.3 1046.0 1038.5 1034.5Fuel Oil 1% NWE FOB Cargo US$/t 636.4 715.7 665.4 673.5 615.9 667.6 648.5 628.7 658.3 649.8 646.3Fuel Oil 3.5% Rotterdam FOB barges US$/t 609.1 686.0 625.5 620.4 589.0 630.2 616.0 596.9 626.5 618.1 614.45-2-2-1 crack US$/b 5.4 7.3 10.1 12.7 6.6 9.2 8.9 9.2 7.6 6.8 8.1Source: History - Platts. Forecasts - SG Cross Asset Research

SG US Price Forecasts2011 1Q 12 2Q 12 3Q 12 4Q 12 2012 1Q 13f 2Q 13f 3Q 13f 4Q 13f 2013f

WTI NYMEX US$/b 95.1 102.9 93.5 92.1 88.2 94.2 93.7 91.5 98.7 99.8 95.9Heating Oil NYMEX US cpg 295.6 315.6 289.6 300.0 304.9 302.5 308.9 307.1 306.3 303.2 306.4Gasoline NYMEX US cpg 282.2 305.0 295.2 294.4 273.2 291.9 295.4 301.2 294.4 273.4 291.1Naphtha USGC Waterborne US cpg 267.5 290.3 263.7 275.6 279.6 277.3 292.7 277.4 294.4 297.2 290.4Jet Fuel 54 USGC US cpg 299.5 318.5 295.7 307.1 299.9 305.3 314.0 311.1 312.3 305.2 310.7#6 Fuel Oil 1% NYH US$/b 99.0 111.6 105.6 104.8 99.0 105.3 103.2 100.5 107.7 108.8 105.13-2-1crack US$/b 25.3 26.6 29.7 32.3 31.0 29.9 32.2 35.8 26.7 19.2 28.5Source: History - Platts. Forecasts - SG Cross Asset Research

SG Singapore Price Forecasts2011 1Q 12 2Q 12 3Q 12 4Q 12 2012 1Q 13f 2Q 13f 3Q 13f 4Q 13f 2013f

Dubai US$/b 106.2 116.1 106.4 106.1 107.5 109.0 108.5 104.5 109.7 108.3 107.8Tapis US$/b 117.1 125.7 114.8 112.3 114.9 116.9 118.6 114.0 118.7 117.3 117.2Gasoil 0.5% US$/b 124.5 132.5 121.7 125.3 125.0 126.1 128.8 122.2 127.2 126.8 126.2Jet Fuel US$/b 125.6 131.8 122.3 126.2 126.7 126.8 129.8 122.7 127.7 127.8 127.0Fuel Oil 180 CST US$/t 648.7 734.4 667.2 658.3 625.5 671.3 639.8 631.9 666.5 663.1 650.3180 CST - 3.5% Rotterdam US$/t 39.6 48.4 41.7 37.9 36.5 41.1 23.8 35.0 40.0 45.0 35.9Fuel Oil 380 CST US$/t 638.5 722.4 656.3 645.1 615.8 659.9 636.7 623.7 657.5 653.1 642.8Source: History - Platts. Forecasts - SG Cross Asset Research



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Oil Drivers Research Contactswxcw

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ResearchContacts

Global Head of ResearchPatrick Legland(33) 1 42 13 97 [email protected]

CROSS ASSET RESEARCH COMMODITIES GROUPHead of Commodities ResearchDr. Michael Haigh(1) 212 278 [email protected]

ParisEuropean Gas & LNG European Power, Coal and CarbonDr. Thierry Bros Paolo Coghe(33) 1 58 98 11 70 (33) 1 42 13 42 [email protected] [email protected]

London SingaporeCoordinator Global Technicals Cross Commodity Strategy Metals Cross Commodity StrategyStephanie Aymes Jesper Dannesboe Robin Bhar Mark Keenan

(44) 207 762 5898 (44) 207 762 5603 (44) 207 762 53 84 (65) 6326 [email protected] [email protected] [email protected] [email protected]

New York Hong KongUS Natural Gas Oil & Products Agriculture Cross Commodity StrategyLaurent Key Michael Wittner Christopher Narayanan Jeremy Friesen(1) 212 278 57 36 (1) 212 278 64 38 (1) 212 278 6773 (852) 2166 [email protected] [email protected] [email protected] [email protected]



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Oil Drivers Disclaimerwxcw

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Disclaimer

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SG - Oil Driver 8May13

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