IEA - Monthly Oil Market Report

10 February 2012
HIGHLIGHTS
AnuneasybalancecharacterisedoilmarketsinJanuary,withtensions
surrounding Iran counteracting a weaker economic outlook. The
onsetofwinterweatherpushedpricesforBrenttosixmonthhighsin
early February. Brent was last trading at $117.50/bbl. By contrast,
risingstocksattheCushingstoragedepotpressuredWTIpriceslower
inearlyFebruary,to$99.50/bbl.
Globaloildemandisforecasttoclimbto89.9mb/din2012,againof
0.8 mb/d (or 0.9%) on the year. Growth has been curtailed by
0.3mb/d versus Januarys OMR, as the economic growth rate that
underpins the global oil demand outlook has been reduced to 3.3%
from4.0%previously.
NonOPECsupplyfellby0.2mb/dto53.2mb/dinJanuary,onlower
global biofuels output, an escalation of conflict in Syria and between
Sudan and South Sudan, and continuing outages in the North Sea.
North American light tight oil production and NGLs, as well as
increasing production in Latin America, offset declines elsewhere,
supportinganexpected0.9mb/dreboundinnonOPECsupplyin2012.
OPECcrudeoilsupplyinJanuaryroseto30.9mb/d,thehighestlevel
since October 2008, on a steady rampup in Libyan production and
sustained output from Saudi Arabia and the UAE. The call on OPEC
crude and stock change is cut by 100 kb/d for 2012, to 29.9 mb/d.
OPECseffectivesparecapacityislargelyunchanged,at2.82mb/d.
Global refinery crude throughput estimates for 1Q12 are largely

unchangedfromlastmonthsreport,asslightlyhigherOECDrunsare
offsetbyaweakeroutlookforLatinAmerica,followingfurthercapacity
rationalisation.At74.9mb/d,global1Q12runs areforecast220 kb/d
aboveyearagolevelsandunchangedfromthepreviousquarter.
DecemberOECDindustryoilstocksdeclinedby40.8mbto2611mb,
and remained below the fiveyear average for a sixth consecutive
month. Forward demand cover fell by 0.7 days to 57.2 days, but
remains1.6daysabovethefiveyearaverage.Januarypreliminarydata
showashallowerthannormal11.4mbbuildinOECDindustrystocks.
TABLE OF CONTENTS
HIGHLIGHTS ................................................................................................................................................................................................... 1
DONT FORGET THE BIT IN THE MIDDLE .......................................................................................................................................... 4
DEMAND .......................................................................................................................................................................................................... 5
Summary....................................................................................................................................................................................................... 5
Global Overview ........................................................................................................................................................................................ 5
OECD ........................................................................................................................................................................................................... 7
North America ...................................................................................................................................................................................... 8
Europe ..................................................................................................................................................................................................... 9
Pacific .....................................................................................................................................................................................................10
Outlook for Japanese Power Sector Oil Demand ................................................................................................................11
Non-OECD ...............................................................................................................................................................................................11
China ......................................................................................................................................................................................................12
Other Non-OECD .............................................................................................................................................................................13
SUPPLY ............................................................................................................................................................................................................15
Summary.....................................................................................................................................................................................................15
OPEC Crude Oil Supply .........................................................................................................................................................................16
Iranian Customers Start Lining Up Alternative Crude Supplies ...............................................................................................18
OECD .........................................................................................................................................................................................................19
North America ....................................................................................................................................................................................19
Short-term Impacts of Keystone XL Decision .......................................................................................................................20
North Sea .............................................................................................................................................................................................21
OECD Asia ...........................................................................................................................................................................................22
Non-OECD ...............................................................................................................................................................................................22
Former Soviet Union..........................................................................................................................................................................22
Latin America .......................................................................................................................................................................................23
Africa .....................................................................................................................................................................................................24
Sudan and South Sudan: Over a Barrel Again ........................................................................................................................24
OECD STOCKS ............................................................................................................................................................................................26
Summary.....................................................................................................................................................................................................26
OECD Inventories at End-December and Revisions to Preliminary Data .........................................................................26
Analysis of Recent OECD Industry Stock Changes ..........................................................................................................................28
OECD North America ......................................................................................................................................................................28
OECD Europe .....................................................................................................................................................................................29
OECD Pacific .......................................................................................................................................................................................29
Recent Developments in Singapore and China Stocks ....................................................................................................................30
Chinas SPR Expansion: Potentially Boosting 2012 Crude Demand ........................................................................................31
PRICES .............................................................................................................................................................................................................33
Summary.....................................................................................................................................................................................................33
Market Overview .....................................................................................................................................................................................33
Futures Markets ........................................................................................................................................................................................35
Activity Levels ......................................................................................................................................................................................35
Market Regulation ...............................................................................................................................................................................37
Grounds for Divorce?..................................................................................................................................................................37
Spot Crude Oil Prices .............................................................................................................................................................................38
Spot Product Prices .................................................................................................................................................................................41
Freight .........................................................................................................................................................................................................43
REFINING .......................................................................................................................................................................................................44
Summary.....................................................................................................................................................................................................44
Global Refinery Overview ......................................................................................................................................................................44
OECD Refinery Throughput..................................................................................................................................................................46
Non-OECD Refinery Throughput ........................................................................................................................................................49
TABLES ............................................................................................................................................. Error! Bookmark not defined.53
TheIEAisSeekingtoRecruitaHeadoftheOilIndustryandMarketsDivision
TheInternationalEnergyAgency(IEA)isseekingadynamicandexperiencedenergyexperttoserveastheEditor
oftheIEAOilMarketReportaswellasleadingitsOilIndustryandMarketsDivision.Heorshewillsuperviseand
coordinatetheIEA'sworkonthemonitoringofandreportingonoilindustryandmarketdevelopments.
Majorresponsibilitiesinclude:
Plan,leadandcoordinatethepreparationoftheIEA'smonthlyOilMarketReport,annualMediumTermOil
Market Report and Annual Statistical Supplement, the presentation of results for the Governing Board and
theStandingGroupontheOilMarket(SOM),andfollowupwithmedia,governmentsandtheoilindustry.
AdviseGovernmentsonrecenttrendsintheglobaloilmarketandmediumtermdevelopmentsandanalysis
on the role of physical and financial markets in oil price formation, particularly highlighting policyrelated
issues and recommending appropriate action; plan and coordinate meetings of the Standing Group on the
OilMarket.
Supervisetheworkofprofessionalandsupportstaffandconsultants.
Developandmaintainclosecontactswithgovernmentofficialsonimportantpolicydevelopments,aswellas
withoilcompaniesandconsultants.
CooperatewithotherDivisionsintheIEAon,interalia,oilindustryaspectsoftheirwork,countryreviews,
thedevelopmentoflongrangeenergyoutlooksandenvironmentalissues.
Provide market information and expertise during oil emergencies and support and participate in exercises
relatedtomaintainingemergencyresponsecapabilities.
Theidealcandidatewillpossess:
Anadvanceduniversitydegreeineconomics,science,engineering,orarelateddiscipline.
Tentofifteenyears'experienceintheinternationaloilindustrywithexperienceinthefieldofoilandenergy
policy.Specificareasofexpertiseincludeanyorallofthefollowing:oilproduction,refininganddistribution,
oiltrade,oilstockpolicyorproductqualityissues.
Strong analytical, communication and interpersonal skills, political sensitivity and ability to establish and
maintaineffectiveworkingrelationswithseniorgovernmentandindustryofficials.
Proven ability in teambuilding as well as in planning, coordinating and supervising team work. Strong
achievement orientation and personal initiative, as well as the ability to work under pressure, often to tight
deadlines.
An excellent level of oral and written communication skills and excellent drafting ability in English; working
knowledgeofFrenchandotherlanguageswouldbeanadvantage.
The IEA operates as an autonomous agency within the Organisation for Economic Cooperation and
Development(OECD).
ThefullvacancynoteandonlineapplicationformwillbeavailableshortlyontheOECDwebsiteatwww.oecd.org.
ClickonJobVacanciesHeadofDivision:OilindustryandMarkets.Thepositionwillstart1July2012.
TheOECDisanequalopportunityemployerofferinganattractiveremunerationpackageand
encouragesapplicationsfromallqualifiedcandidates.
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT
Organisation de coopration et de dveloppement conomiques
M ARKET O VERVIEW
I NTERNATIONAL E NERGY A GENCY O IL M ARKET R EPORT
DONT FORGET THE BIT IN THE MIDDLE
Itistempting,amideconomicturmoilononehand,andaratchetinghigheroftensionsoverIranonthe
other, to see the oil market via the polar extremes of enduser demand and crude oil production. For
sure, this months report dwells on recent economic downgrades, and resultant weaker oil products
demandgrowthfor2012.Aswenotedlastmonth,thisisprovidingaceilingforotherwisestubbornly
highcrudeprices.Equallyimpossibletoignoreistheinfluenceofconjectureoverthepotentialimpactof
internationalsanctionsonIraniancrudesupplies.Inthatregard,themarketin2012likelyhassufficient
supplyside flexibility (between existing OPEC spare capacity and expected 2012 capacity additions
amongOPECandnonOPECproducers)toadjusttoanylossinIranianvolumes.Thereisalso,asever,the
backstop provided by strategic stocks in the event that market mechanisms fail. Despite these
assurances,perceptionsofimpendingsupplyissuesareclearlyplacingafloorunderoilpricesfornow.
However,simplyfocusingontheextremesoffinaloilproductdemandandupstreamproductioncapacity
neglects the everimportant influence on markets and prices of the midstream and downstream
segments of the industry. Changes in the availability of pipeline capacity and marine tankers, shifts in
strategicstorageandfluctuationsinrefineryprocessingcapacitycanallplayaroleininfluencingnotjust
absolutepricesbut,moreimportantly,price differentials,arbitrageflowsandthereforeoverallmarket
dynamics. While the potential for economic meltdown or heightened geopolitical tension makes good
headlines,andprovidesanenvelopeforpricesingeneral,itcannotwhollyexplainpricedynamics.
TherenewedwideningofBrentsnowentrenchedpremiumtoWTIisacaseinpoint.Therearemultiple
contributoryfactors,butashortageofpipelinecapacitytoevacuatecrudefromtheUSMidwesttoUS
Gulfrefineriesiscentraltotheissue.AnaddedtwististhedeferraloftheKeystoneXLpipelineproject,
even though that decision will arguably prompt development of alternative routes to the US Gulf or,
longer term, push Canadian crude towards the Pacific Coast. In a global context, strong relative Brent
priceswouldnormallyconfineAtlanticBasincrudeswithintheregion.However,Japanesepowersector
oildemand,afternuclearcapacityshutdowns,isstrengtheningAsianfueloilprices,andsotooheavier
MiddleEastcrudeprices.AnarbitrageforBrentlinkedAfricancrudesintoAsiahasthereforeopened.
The importance of logistical infrastructure is also emphasised by the current SudanSouth Sudan
stalemate.ApipelinetariffdisputeisdeprivingAsianbuyersofmarginalbarrelsoffueloilrichcrude,also
used for direct burning. If the situation continues, it may boost the attractiveness to Asian buyers of
Iranianbarrelsofferedintotheregionatdiscountedprices,notwithstandingEUandUSsanctions.
AnotheroverlookedelementintheIraniansituationconcernsconfusionoverthelikelyimplementation
oftheUSandEuropeanfinancialmeasures.Thisiscausingmarineinsurersandshipownerstobedoubly
cautiousoverthecovertheyprovideortheroutestheysail.Itwilllikelycomplicatecrudeshipments,not
onlythosetransitingtheMiddleEastGulf,butalsoonabroaderglobalbasis.Whytakeariskoninsuring
avesselthathasregularlycalledatIranianportsinrecentmonths,ifitmightresultinpunitiveeconomic
measuresfromthemiddleoftheyear?Thatsaid,amplenewbuildtankercapacitymayeasetheimpact
ofwhatmightotherwisebealogisticalbarriertotrade.
Wealsonotethismonththatincrementalmidstreamdemand,forexampletofillnewstrategicstorage
capacityinChina,couldpullupwardsof200kb/dextracrudeintoAsianmarkets,overandaboverising
regionalproductsdemandandrefineryruns.Finally,theapparentparadoxofweakeningEuropean2012
oildemand,butstrengtheningrefiningmargins,lookslesspuzzlingwhenrecentrefineryrationalisationis
takenintoaccount.Aspateofactualandthreatenedclosures,fromPetroplusplantsinEurope,through
tomajorexportorientedunitsintheCaribbean,plusalatewinterfreezeinEuropeandAsia,havedriven
products cracks sharply higher, despite an increasingly gloomy economic picture. The midstream and
downstreammeatinthesandwichisoftenjustasinterestingasthemorevisiblebreadthatsurroundsit.
10F EBRUARY 2011
D EMAND
DEMAND
Summary
An increasingly problematic global economic backdrop confirmed by the IMF lowering its
economicprojectionsisseensupporting0.8mb/dofoildemandgrowthin2012(versus1.1mb/d
inJanuarysOMR).GlobalGDPgrowthisreviseddownto3.3%for2012,fromthe4.0%levelassumed
sinceSeptember.Totaloilproductdemandwillclimbto89.9mb/din2012,from89.1mb/din2011.
AtwospeedoutlookprevailswithrobustoildemandgrowthenvisagedinthenonOECD,while
demand continues to fall across most of the OECD. NonOECD oil demand will rise by 1.2mb/d
(2.8%) in 2012, more than offsetting the reduction in OECD consumption of 0.4mb/d (0.8%),
mimickingthedemandtrendsseenin2011.
Themostrecentdatasuggestaglobaldemandcontractionof5kb/dinthefourthquarterof2011
yearonyear,thefirstsuchdropsincetheglobalcreditcrunch,albeit4QdemandinNorthAmerica
andnonOECDAsiacameinstrongerthanpreliminarydatasuggested.Europesawthesteepestyear
onyearfallin4Q11,withdemand690kb/dloweramidweakereconomicactivityandmildweather.
NorthAmericandemandwas530kb/dlessthanayearago.
Global Oil Demand (2010-2012)

(million barrels per day)
Africa
Americas
Asia/Pacific
Europe
FSU
Middle East
World
Annual Chg (%)
Annual Chg (mb/d)
Changes from last OMR (mb/d)
1Q10 2Q10 3Q10 4Q10

3.3
3.4
3.4
3.4
29.5 30.0 30.6 30.2
27.2 27.0 26.7 28.3
15.0 14.9 15.6 15.5
4.4
4.3
4.6
4.6
7.4
7.8
8.3
7.7
86.8 87.5 89.1 89.8
2.6
3.2
3.5
3.5
2.2
2.7
3.0
3.0
-0.01 0.03 0.07 0.05
2010
3.4
30.1
27.3
15.3
4.5
7.8
88.3
3.2
2.8
0.04
1Q11 2Q11 3Q11 4Q11

3.4
3.3
3.3
3.4
30.1 29.8 30.2 29.8
28.6 27.3 27.4 28.9
14.9 14.8 15.4 14.9
4.5
4.6
4.8
4.9
7.6
8.0
8.5
8.0
89.0 87.9 89.5 89.8
2.6
0.4
0.5
0.0
2.2
0.4
0.4
0.0
0.05 0.01 0.02 0.29
2011
3.3
30.0
28.1
15.0
4.7
8.0
89.1
0.8
0.7
0.10
1Q12 2Q12 3Q12 4Q12 2012

3.5
3.5
3.5
3.6
3.5
29.8 29.7 30.4 30.2 30.0
29.2 28.2 28.1 29.6 28.8
14.4 14.3 15.0 14.8 14.6
4.6
4.7
4.9
5.0
4.8
7.8
8.2
8.6
8.1
8.2
89.1 88.7 90.5 91.2 89.9
0.1
1.0
1.1
1.5
0.9
0.1
0.9
1.0
1.4
0.8
-0.34 -0.23 -0.18 0.13 -0.15
Global Overview
Theworldeconomyisnowexpectedtoexpandby3.3%in2012,accordingtotheIMFsJanuaryupdate,a
sharpdeteriorationfromitspreviouslyassumed4.0%growth.Thelargestadjustmentsareappliedtothe
euro area, down by 1.6 percentage points since September and leaving an absolute euro zone
contractionof0.5%in2012.MuchofEuropealreadysawdeclinesineconomicactivityin4Q11andwith
further drops assumed for the 1Q12, this equates to the technical definition of recession. NonOECD
Europe,sawsimilarstarkreductions,with1.6percentagepointsextractedfromtheirgrowthestimates,
to1.1%.
In North America, the US outlook remained unchanged, at 1.8% GDP growth in 2012. However, both
Canada and Mexico sawslight downgrades. The Mexican economy is now forecast to grow by 3.5% in
2012(3.6%previously),whiletheCanadianestimatewasreducedto1.7%,from1.9%previously.
A combination of the worsening external environment and weakening internal demand, meanwhile,
curtailed the IMFs estimate for economic growth in the emerging economies, to 5.4% for 2012
(previously 6.1%). Notable reductions in expected 2012 economic growth affect China (8.2% versus a
previous9.0%estimate),India(7.0%versus7.5%)andBrazil(3.0%versus3.6%).Underlyingtheoverall
forecastistheIMFsassumptionthatEuropeanpolicymakersintensifyeffortstoaddressthedebtcrisis.
Withoutsuchcohesiveaction,theFundseesaworseeconomicoutcomelikelytooccur.
10F EBRUARY 2012
D EMAND
Real GDP Growth
Current vs. Previous
OMR dated 10 February 2012
OMR dated 12 October 2011
% change
2011
2012
WORLD
3.7
3.3 WORLD
(0.1)
(0.6)
OECD
1.6
1.1
(0.1)
(0.8)
OECD, North America
1.8
1.9
OECD, Europe
1.9
(0.2)
0.6
2.3
6.2
5.7
OECD, Pacific
Non-OECD
OECD
OECD, North America
0.0
(0.1)
OECD, Europe
(1.6)
OECD, Pacific
Non-OECD
(0.2)
(0.6)
(0.2)
(0.5)
Africa
4.3
4.9
Africa
0.5
0.5
Latin America
4.4
3.8
Latin America
(0.3)
(0.2)
China (excl. Hong Kong)
9.2
8.2
China (excl. Hong Kong)
(0.3)
(0.8)
Other Asia
5.9
5.7
Other Asia
(0.4)
(0.6)
Non-OECD Europe
2.0
2.1
Non-OECD Europe
0.2
(0.9)
FSU
4.5
3.9
FSU
(0.1)
(0.4)
Middle East
4.4
3.3
Middle East
(0.3)
(0.7)
Sources: IMF, IEA
Having grown by as much as 5.0% in 2010, the global economy decelerated sharply in 2011, to 3.8%.
Globaloildemandrosefrom85.6mb/din2009,to88.3mb/din2010and89.1mb/din2011,implying
growthof2.8mb/din2010and0.7mb/din2011.Admittedly,the2010trajectorywasmagnifiedbya
postrecessionarybounce,butthesheerscaleofthe2011slowdownsurprisedmostanalysts.Ourown
projections for 2011 were progressively scaled back, from initial 4.3% GDP growth and 1.3 mb/d of
incrementaloildemand.
Global Oil Demand Growth 2010/2011/2012

thousand barrels per day
North America
Europe
471
283
FSU
-110
227
89
-288
-336
1448
Middle East
-109
290
-271
195
167
Asia
744
690
Latin America
304
184
158
67
Africa
166
Global Demand Growth

(mb/d)
-46
2010
2011
2012
2.75
0.74
0.83
3.2%
0.8%
0.9%
Despitetheeconomicbackdropdarkeningfurtherin2012withglobalgrowthofjust3.3%envisaged
globaloildemandisforecasttoaverage89.9mb/d,up0.8mb/don2011.Growthmarginallyacceleratesas
prices,basedonthefuturesstrip,areunlikelytohavethesamenegativeinfluenceondemandasin2011.
Middle distillates will provide the majority of global demand growth in 2012, with gasoil demand
projected to rise by 1.6% supported by the still relatively strong industrial base in emerging markets.
Consumptionoffueloilandgasolinelagsbehind,withdemandgrowthintheseproductsforecasttoinch
just 0.4% higher in 2012. Fuel oil demand is suffering at the hands of switching to other less polluting
fuels. Gasoline demand is ailing due to the continued, albeit slowing, trend in many parts of the
transportationsectortowardsdieselandtheplateauincarsalesacrosstheOECD.
10F EBRUARY 2012
D EMAND
Annual Oil Demand

Growth, %
Real GDP vs. Oil Demand Growth

1981-2012
2004
4
3
2
1
0
-1
-2
-3
-4
World: Total Demand, Y-o-Y Growth

m b/d
OECD
Non-OECD
World
2010
1991
2007
1
2009
1982
2011
1983/2008 2012
(1)
(2)
1981
-2
(3)
0
2
4
Global Real GDP Grow th, %
(4)
1Q07
4Q07
3Q08
2Q09
1Q10
4Q10
3Q11
OECD
Preliminary data for December imply an OECDwide decline of around 1.2 mb/d (or 2.6%) on the
corresponding period a year earlier, leading to a 4Q11 drop of 1.0 mb/d or 2.1% over 4Q10. Europe,
predictablygiventheweakeconomicbackdrop,ledthedowntrend,withyearonyeardemanddeclineof
0.7mb/dseeninbothDecemberand4Q11overall.
OECD Demand based on Adjusted Preliminary Submissions - December 2011

Gasoline
mb/d
% pa
OECD North America*
US50
Canada
Mexico
OECD Europe
Germany
United Kingdom
France
Italy
Spain
OECD Pacific
Japan
Korea
Australia
OECD Total
* Including US territories
10.16
8.54
0.74
0.83
2.00
0.45
0.31
0.16
0.23
0.12
1.68
1.07
0.20
0.35
13.84
-3.7
-4.2
-0.4
-1.1
-3.1
9.9
-4.8
-6.4
-9.5
-6.6
2.3
1.4
4.1
0.4
-2.9
Jet/Kerosene
mb/d
% pa
1.62
1.43
0.10
0.06
1.20
0.19
0.34
0.15
0.08
0.10
1.20
0.83
0.22
0.13
4.02
-0.6
-0.5
-8.0
8.8
-1.4
24.8
0.6
4.4
-13.0
-8.5
-0.9
2.0
-12.9
5.0
-0.9
Diesel
mb/d
% pa
4.01
3.43
0.22
0.32
4.18
0.66
0.42
0.68
0.47
0.44
1.15
0.44
0.29
0.36
9.34
1.3
0.9
-2.3
8.7
0.6
10.5
4.9
-0.3
-2.7
-5.2
3.9
-2.0
3.2
10.7
1.3
Other Gasoil
mb/d % pa
RFO
mb/d % pa
Other
mb/d
% pa
Total Products
mb/d
% pa
1.09
0.56
0.37
0.14
1.90
0.40
0.11
0.25
0.13
0.22
0.63
0.48
0.14
0.00
3.61
0.92
0.51
0.10
0.24
1.20
0.15
0.06
0.11
0.10
0.18
0.98
0.66
0.28
0.02
3.10
5.58
4.18
0.71
0.64
3.42
0.51
0.27
0.40
0.48
0.29
3.47
2.01
1.30
0.15
12.47
23.37
18.65
2.24
2.24
13.91
2.37
1.51
1.75
1.49
1.35
9.11
5.51
2.43
1.02
46.39
-15.3
-27.6
1.9
8.7
-15.5
-14.5
-3.0
-39.7
-19.4
-12.9
-3.3
-2.5
-4.9
0.0
-13.6
3.6
-3.2
-11.1
33.6
-8.8
-10.8
-7.3
-10.3
-24.8
-4.3
22.9
58.3
-19.3
7.2
3.2
-8.04
-10.6
-1.6
3.0
-4.8
-6.4
-3.3
-7.2
-2.0
-8.0
7.6
12.5
3.6
-5.5
-3.2
-4.1
-5.5
-1.5
5.3
-4.7
0.8
-0.8
-10.9
-7.6
-7.4
5.5
9.5
-1.8
3.6
-2.6
Gasoline,gasoilandLPGdemandintheOECDweakenedinDecember,withallthreeseeingrespective
yearonyear demand declines of 0.4 mb/d. Only residual fuel oil bucked Decembers falling OECD
demandtrend,witha0.1mb/dyoygainseenastheJapanesepowersectorcontinuedtorunfueloil
aftermidMarchstsunamirelatedclosuresofnuclearfacilities.
OECDdemandisexpectedtofallby0.4mb/dyoyin2012,or0.8%,withgasolineaccountingformore
than 40% of the decline. In contrast, gasoil/diesel demand in the OECD should edge down by a more
modest35kb/d(0.3%).Itisassumedthateconomicslowdownissharpestin4Q11and1Q12,sothat
theannualoildemandcontractiontapersoffrunningthrough2012.
10F EBRUARY 2012
D EMAND
OECD: Total Oil Product Demand
m b/d
52
OECD: Residual Fuel Oil Demand
m b/d
5.0
4.5
49
4.0
3.5
46
3.0
43
Jan
Apr
Jul
Range 2006-2010
2010
Oct
2.5
Jan
5-year avg
2011
Jan
Apr
Jul
Range 2006-2010
2010
Oct
5-year avg
2011
Jan
North America
The latest preliminary statistics for December point towards sharply falling North American demand,
down 4.1% on the corresponding reading a year earlier, despite numerous reports of economic
resilience. Our estimates suggest a US demand contraction of more than 5% in December, with
particularlysharpdeclinesforheatingoilandLPGgivenunseasonablymildweather.
Days
Heating Degree Days - USA

Diff. to 10-Year Average and Last Year
US50: Heating Oil Demand
kb/d
150
1,300
100
1,100
50
900
700
(50)
500
(100)
300
(150)
100
(200)
Dec 10
Mar 11
Diff to 10-year Avg
Jun 11
Sep 11
Jan
Apr
Jul
Range 2006-2010
2010
Dec 11
Diff to Previous Year
Oct
5-year avg
2011
Jan
TheUSeconomyhasrecentlybeenshowingsignsofrecovery.Earlyindicatorsof4Q11GDPgrowthpoint
towards a 2.8% expansion, not far off its long term trend, while robust statistics have emerged in the
employmentandPurchasingManagersIndices(PMI).Consumptionofoilproductshashoweverfailedto
match the more supportive economics, a consequence we believe of cashstrapped US consumers
heightenedaversiontohighprices.USgasolineprices,forexample,havebeenclearlyaboveyearearlier
levels since the end of 2009. The premium over previous year prices peaked, just shy of 40%, in
May2011, coinciding with a period of 3% yearonyear contraction in gasoline demand, a trend that
appearstohavebecomeentrenched.
kb/d
2,800
US50: LPG Demand
kb/d
22,000
US50: Total Oil Product Demand
2,600
2,400
20,500
2,200
2,000
19,000
1,800
1,600
1,400
17,500
Jan
Apr
Jul
Range 2006-2010
2010
Oct
5-year avg
2011
Jan
Jan
Apr
Range 2006-2010
2010
Jul
Oct
5-year avg
2011
Jan
10F EBRUARY 2012
D EMAND
Despitestarting2011ingrowthterritory,USconsumptionhasedgedlowereversince,withthepaceof
thedeclineescalatingtoaround3%inboth3Q11and4Q11,takingdemandto18.7mb/d.USdemandis
expected to decline by around 2% in the first quarter of 2012 and by 1% in the second quarter. The
strengthening economy, from midyear, could then support a slowly recuperating US demand trend.
Nonetheless,USconsumptionfortheyearasawholeisseenedging0.5%lower,equivalenttoadecline
ofaround0.1mb/d.
Europe
Inlinewiththeweakeconomicoutlook,Europeanoildemandwilllikelypostthegreatestrelativedecline
in2012,downby0.3mb/dfrom2011atanaverage13.9mb/d.TheLPG,fueloilandgasolinecategories
areforecasttocontractmostsharply,downby4.7%,4.4%and3.7%respectivelyin2012.Indeedallof
the major European product subcategories will see demand contractions, as the weaker economic
backdropcoupledwithpersistentlyhighassumedpricesacttosuppressconsumption.
OECD Europe:
Total Oil Product Demand
m b/d
16.5
m b/d
2.8
16.0
2.6
15.5
2.4
15.0
OECD Europe:
Motor Gasoline Demand
2.2
14.5
2.0
14.0
13.5
1.8
Jan
Apr
Jul
Range 2006-2010
2010
Oct
5-year avg
2011
Jan
Jan
Apr
Jul
Range 2006-2010
2010
Oct
5-year avg
2011
Jan
PreliminaryDecemberdatapointtowardsayearonyearslideinOECDEuropeanoildemandfor4Q11of
0.7mb/d, or 4.7%, reflecting both economic slowdown and mild winter weather. Markits Composite
PMI(whichtrackstheoverallhealthoftheeconomy)fortheeurozonefellto48.3inDecemberclearly
signalling a decline in business sentiment (whereby any reading below 50 signals a contraction)
whereasthemoreoilintensiveManufacturingPMIfellevenfurther,to46.9.
m b/d
OECD Europe: Total Demand Growth

by Fuel, 2010-2012
kb/d German: Total Oil Product Demand

3,100
0.2
2,900
0.1
-
2,700
(0.1)
2,500
(0.2)
2,300
(0.3)
2,100
(0.4)
Gasoline
(0.5)
2010
2011
Diesel
Other
2012
Jan
Apr
Jul
Range 2006-2010
2010
Oct
5-year avg
2011
Jan
Having led the drop in 2011 consumption, the heavily indebted economies of southern Europe are
expectedtocontinuetodominatetheforecastcontractioninOECDEuropeandemandin2012.Italian
demand,forexample,willfallby4.9%(or70kb/din2012),astheIMFpredictsafurthereconomicdrop
of around 2.2%. The Italian forecast follows on from Decembers stark 7.6% contraction, with the
residual fuel oil (24.8%), naphtha (15.4%) and LPG (13.8%) categories particularly weak. The Italian
manufacturingPMIfellto44.3inDecember.Spainwillalsoseedemanddropbyaround4.5%in2012,
with the IMF predicting a 1.7% fall in economic activity. The Spanish projection comes on the back of
Decembers7.4%yearonyeardrop.ThemanufacturingPMIforSpainfellto43.7inDecember.
10F EBRUARY 2012
D EMAND
Slightly stronger demand is foreseen in the more northerly European nations. German demand, for
example, is expected to fall by just 0.5% in 2012. The IMFs latest economic projection for Germany
pointstowardsamodestgainof0.3%in2012.ThepreliminaryDecemberseriesforGermanydepicteda
0.8% yearonyear gain in demand. Mild December temperatures suppressed German heating oil
demand,whichfellby14.5%onitsyearearlierlevel.DemandintheNetherlandsisexpectedtofallby
lessthan1%,withGDPgrowthassumedat0.2%in2012.
French December demand more closely matched the south European trend, declining yoy by 10.9%.
Heating oil (39.7%) and LPG (27.0%) led the decline, underpinned by milder than normal December
temperatures.Thegenerallyailingeconomicbackdrop,withunemploymentabove10%andbroadlyflat
GDPforeseenfor2012,isexpectedtokeepoildemandonadeclining2%trend.
Pacific
OECDPacificdemandinDecembergrewby5.5%yoy.Gainsindiesel(+3.9%),residualfueloil(+22.9%)
and other products (+40.2%) including direct crude oil burning drove the rise on the back of cold
weatherandlownuclearcapacityavailability(seebox,below).Decemberheatingdegreedays(HDDs)in
theregionwereaboveboththetenyearaverageandthepreviousyear,especiallyinJapan.
m b/d
10.0
9.5
9.0
8.5
8.0
7.5
7.0
6.5
OECD Pacific:
Total Oil Product Demand
Jan
Apr
Jul
Range 2006-2010
2010
Oct
5-year avg
2011
Heating Degree Days -OECD Pacific

Diff. to 10-Year Average and Last Year
Days
80
60
40
20
(20)
(40)
(60)
(80)
Jan
Jan 11
Apr 11
Diff to 10-year Avg
Jul 11
Oct 11
Jan 12
Diff to Previous Year
TherecentdeclineinSouthKoreandemandcontinuedwithDecembers1.8%yearonyearcontraction.
WorseningbusinessconditionsintheKoreanmanufacturingsectorfurtherunderminedoildemand,as
the PMI fell for a fifth successive month to 46.4. Korean demand will modestly expand by 15 kb/d (or
0.6%)in2012,to2.24mb/d.
kb/d
2,600
kb/d
6,500
Korea: Total Oil Product Demand
2,500
6,000
2,400
5,500
2,300
Japan: Total Oil Product Demand
5,000
2,200
4,500
2,100
2,000
4,000
1,900
3,500
Jan
Apr
Jul
Range 2006-2010
2011
Oct
5-year avg
2012
Jan
Jan
Apr
Jul
Range 2006-2010
2010
Oct
5-year avg
2011
Jan
JapaneseoildemandgrewinDecemberby9.5%yearonyear,liftedbygreaterconsumptionofresidual
fuel oil (58.3%) and other products (54.9%) on the back of additional power generation demand amid
nuclear capacityclosures.Takingintoaccountthe currentfuel mixin thepowersector,totalJapanese
demand will edge 0.9% higher in 2012, to 4.5 mb/d. Demand growth in the OECD Pacific region in
generalwillaccelerateveryslightly,to0.8%(adding0.1mb/dofadditionaldemand),to7.9mb/d.
10
10F EBRUARY 2012
D EMAND
Outlook for Japanese Power Sector Oil Demand

BackinAugust2011,theOMRcarriedoutanupdatedassessmentoftheimpactofnuclearoutagesinJapan
(see Nuclear Outages See Japans Power Sector Turn to Thermal, OMR dated 10August 2011). Only
16nuclear reactors were operational and the distinct possibility existed that all 54reactors could be idle
untilMay2012.Inthatreport,weestimatedthatincrementaloildemandcouldamountto230kb/din2011
and grow to 270kb/d in 2012 versus an outlook of
Japanese Power Generation Sources
normal nuclear generation (see chart; combined crude TWh
and fuel oil generation demand was about 200kb/d in 100
2010). Our latest update, based on nuclear capacity
80
droppingtolessthan0.9TWhinAprilandslowlycoming
60
backonlineto15TWhbyDecember2012,nowsuggests
incrementaloildemandinthepowersectorof280kb/d
40
in2011and320kb/din2012.Thisexpectedincremental
20
demand implies an upwardrevision of 50 kb/d for both
Source: FEPC
years. Should all nuclear plants remain idle after April,
0
Dec 09
Jun 10
Dec 10
Jun 11
Dec 11
then incremental oil demand could reach 465 kb/d
versusanoutlookofnormalnucleargeneration.
NUCLEAR
HYDRO
THERMAL
Fossilfuelpoweredplants(FFPP)generated60.4TWhin
December, a yearonyear expansion of 41.7%, backed by the nuclear outages and colderthannormal
temperature.ResidualoilandcrudeconsumptionatFFPPcameinat560kb/dinDecember,470kb/dmore
than would have been assumed in pretsunami Japan. The incremental need for oil in the power sector
offsetcontractingdemandelsewhereintheeconomyandledtoJapaneseoildemandrisingoverallin2011
by34kb/dor0.8%.Ourlatestprojectionenvisagestotal2012Japaneseoildemandgrowthof42kb/dor
0.9%, with the power sector demand averaging 320 kb/d, again offsetting weaker lighter products
requirements.
Japan: Forecast Incremental Oil

Demand For Power vs Normal
k b/d
500
TWh
18
Japanese Nuclear Power Generation

Current vs. Previous Scenarios
15
400
12
300
200
100
Sep 11
Feb 12
Fuel Oil
Jul 12
Crude Oil
0
Apr 11 Aug 11 Dec 11
Dec 12
No-nuclear
Some-nuclear
Apr 12 Aug 12 Dec 12

Prev. No nuclear
Prev. Some-nuclear
Overall, the Japanese oil demand outlook remains highly uncertain, and the possibility of a no nuclear
capacityprofile,atleastfor2012,remainsarealone.Demandwillalsobeinfluencedbyeffortsputinplace
to improve enduse efficiency; the impact of weaker economic growth; and the potential for renewed
weather extremes such as were seen in summer 2010. Nonetheless, sustained Japanese power sector oil
demandwilllikelybeoneofthefewgrowthareasforOECDoilconsumptionin2012.
Non-OECD
Maintainingitsrelativelystrongexpansionarybackdrop,thenonOECDregionwillseedemandgrowthof
1.2mb/d (or 2.8%) in 2012, to average 44.6 mb/d. The industrially important gasoil market will
predominate,forecasttoprovide0.4mb/doftheprojected2012gaininoildemand.ThenonOECDwill
dominateinoildemandtermsasnotonlyaremanyofitseconomiesmoreheavilydependentuponoil,
buttheyarealsodrivenbystrongerunderlyingeconomicgrowth.Economicgrowthintheemergingand
developingeconomiesaverages5.4%in2012.
10F EBRUARY 2012
11
D EMAND
Non-OECD: Demand by Product

(thousand barrels per day)
Demand
Annual Chg (kb/d)
Annual Chg (%)
2010
2011
2012
2011
2012
2011
LPG & Ethane
4,734
4,968
5,125
234
157
4.9
3.2
Naphtha
2,680
2,655
2,699
-25
43
-0.9
1.6
Motor Gasoline
8,081
8,357
8,600
276
243
3.4
2.9
Jet Fuel & Kerosene
2012
2,640
2,728
2,787
88
59
3.3
2.2
12,944
13,507
13,948
563
440
4.4
3.3
Residual Fuel Oil
5,480
5,515
5,603
35
88
0.6
1.6
Other Products
5,600
5,700
5,882
100
181
1.8
3.2
Total Products
42,160
43,431
44,644
1,271
1,212
3.0
2.8
Gas/Diesel Oil
Havingstarted2011inastronglyexpansionaryphase,withoildemandup6.1%yearonyearinJanuary,
the nonOECD demand trend has subsequently slowed, with preliminary data for December pointing
towards1.0%yearonyearexpansion,itsslowestpaceofgrowthsinceApril2009.Puttingtheslowdown
inperspective,thecomparisonisagainstexceptionallystrongdemandforlate2010inparticular.
Non-OECD: Demand Growth by Region
m b/d
2.5
m b/d Non-OECD: Total Oil Product Demand

46
2.0
44
1.5
42
1.0
40
0.5
38
36
(0.5)
34
Jan
Apr
Jul
Range 2006-2010
2010
Oct
5-year avg
2011
2009
China
Latam
Jan
2010
2011
Oth. Asia
Other
2012
M. East
Non-OECD
Non-OECD: Demand by Product

Demand
Annual Chg (kb/d)
Annual Chg (%)
Oct-11
Nov-11
Dec-11
Nov-11
Dec-11
Nov-11
LPG & Ethane
4,964
5,023
5,104
202
250
4.2
5.1
Naphtha
2,582
2,798
2,645
97
-154
3.6
-5.5
Motor Gasoline
8,446
8,517
8,811
304
353
3.7
4.2
Jet Fuel & Kerosene
Dec-11
2,790
2,869
2,835
178
96
6.6
3.5
13,569
13,999
13,655
762
-124
5.8
-0.9
Residual Fuel Oil
5,538
5,518
5,675
-26
70
-0.5
1.2
Other Products
5,566
5,693
5,570
133
-65
2.4
-1.2
Total Products
43,455
44,417
44,294
1,650
426
3.9
Gas/Diesel Oil
1.0
China
TheoutlookforChineseoildemandhasbeencurtailed,onthebackofweakereconomicunderpinnings,
withgrowthof0.4mb/d(or3.9%)nowestimatedfor2012.ApreviousGDPgrowthassumptionof9%for
2012hasnowbeencurbedto8.2%.Thislowergrowthassumption,alongwithhigherdomesticprices,
underpins the trimmed demand projection. Moreover, some analysts have been pointing to the
prospectsforweakerChinesegrowth,amidconcernsovertheimpactofanailingpropertymarketand
sluggishmanufacturingindicators.
12
10F EBRUARY 2012
D EMAND
China: Demand by Product

Demand
Annual Chg (kb/d)
Annual Chg (%)
2010
2011
2012
2011
2012
2011
668
693
709
26
16
3.8
2.3
Naphtha
1,129
1,165
1,201
37
35
3.3
3.0
Motor Gasoline
1,546
1,655
1,718
109
63
7.1
3.8
368
408
419
39
11
10.7
2.7
3,143
3,337
3,448
195
111
6.2
3.3
531
542
544
11
2.0
0.4
LPG & Ethane
Jet Fuel & Kerosene

Gas/Diesel Oil
Residual Fuel Oil
2012
Other Products
1,685
1,714
1,846
30
132
1.8
7.7
Total Products
9,069
9,514
9,885
445
371
4.9
3.9
China: Total Oil Product Demand
kb/d
10,000
China: Jet Fuel & Kerosene Demand
9,500
kb/d
500
9,000
450
8,500
400
8,000
350
7,500
300
7,000
250
200
6,500
Jan
Apr
Range 2006-2010
2010
Jul
Oct
5-year avg
2011
Jan
Jan
Apr
Jul
Range 2006-2010
2010
Oct
5-year avg
2011
Jan
Apr
Jul
Range 2006-2010
2010
Oct
5-year avg
2011
Jan
PreliminaryestimatesofapparentdemandinChinanetproductimportsplusrefineryoutputpoint
towardsanearstagnationindemandinDecemberandthefourthquarteringeneral.However,yearon
yearcomparisonsforChinapostSeptemberhavetobetreatedwithcautiongiven2010sunusuallyhigh
fourthquarterdemandstrength.Thefourthquarterof2011wasamixedbag,withstronggainsinthe
jet/kerosene(+16.9%)andLPG(9.6%)categoriescancellingoutbigdropsinotherproducts(8.6%)and
residualfueloil(4.1%).
kb/d
China: Jet Fuel & Kerosene Demand
China: Gasoil Demand
3,400
kb/d
500
3,200
450
3,000
400
2,800
350
2,600
300
2,400
250
2,200
200
3,600
Jan
Apr
Jul
Range 2006-2010
2010
Other Non-OECD
Oct
5-year avg
2011
Jan
Jan
ThepreliminaryDecemberdataforIndiamatchedourforecastfromamonthago,of3.5%yearonyear
growth. Strong gains in gasoline (+11.5%), gasoil (+6.0%) and LPG (+5.3%) offset declines in naphtha
(20.8%), residual fuel oil (18.2%) and jet/kerosene (2.4%). The 4Q11 demand estimate came in at
3.6mb/d, 0.2mb/d (or 5.9%) higher than 4Q10, and a rise of 50 kb/d compared with last months
estimate.Thishigherbaseline,andaneconomicgrowthassumptionof7.0%,combinedtogenerateoil
demandgrowthof120kb/d(3.4%)in2012.
10F EBRUARY 2012
13
D EMAND
Y-o-Y
% Chg
5
India: Total Oil Product Demand
kb/d
3,900
3,700
3,500
India: Total Oil Product Demand
3,300
3,100
2,900
2,700
2,500
Jan
Apr
Jul
Range 2006-2010
2010
Oct
5-year avg
2011
Jan
2009
2010
2011
2012
ArgentineanoildemandgrewinDecemberby1.9%following1.3%growthinNovemberandcontinuing
the rising trend evident since midyear. Strong growth in gasoline (29.2%) and fuel oil (25.1%)
outweighed the hefty declines in other products (10.8%). Resilient economics have supported the
relativelystrongdemanddynamic,asindustrialoutputroseby2.8%yearonyearinDecember,whilecar
sales rose 32%. Having risen by close to 30 kb/d (4%) in 2011, demand growth will abate to a more
subdued10kb/d(1.3%)in2012astheprojectedgrowthrateoftheeconomyroughlyhalvesto3.7%.
kb/d
Argentina: Motor Gasoline Demand
Sales
Argentina: Monthly Car Sales
70,000
140
60,000
50,000
120
40,000
100
30,000
20,000
80
Oct
5-year avg
2011
Jan
Range
2011
Dec
Nov
Oct
Sep
Jul
Jun
Apr
Aug
Apr
Jul
Range 2006-2010
2010
May
Jan
Mar
Jan
60
Feb
10,000
5 yr Average
2010
14
10F EBRUARY 2012
S UPPLY
SUPPLY
Summary
Global oil supply rose by 0.1mb/d to 90.2mb/d in January, with gains in OPEC NGLs and crude
productionoffsettinga0.2mb/ddeclinefromnonOPECcountries.Comparedtoayearago,global
oil production stood 1.0mb/d higher in January, 80% of which stemmed from increased output of
OPECcrudeandNGLs.
NonOPEC supply fell by 0.2mb/d to 53.2mb/d in January, on lower global biofuels output, an
escalationofconflictinSyria,aworseningdisputeovertransitrevenuesbetweenSudanandSouth
Sudan,andcontinuingoutagesintheNorthSea.NorthAmericanlighttightoilproductionandNGLs,
as well as increasing production in Latin America, offset declines elsewhere and should support a
strongnonOPECsupplyrebound,withgrowthof+0.9mb/dexpectedin2012.
OPEC crude oil supply in January rose to 30.9mb/d, the highest level since October 2008, largely
reflecting the steady rampup in Libyan output, as well as sustained output from Saudi Arabia and
the UAE. New international sanctions targeting Irans oil exports do not take effect until 1 July, but
severalEuropeancustomershavealreadycurtailedimportsofIraniancrudeandAsianbuyersarealso
movingtolineupalternativesupplies.
ThecallonOPECcrudeandstockchangeisreducedby100kb/dforboththefirsthalfof2012and
the year as a whole. It averages 29.8mb/d for 1Q12 and 29.2mb/d for 2Q12. At 29.9mb/d, the
2012callis700kb/dbelowthe2011average,duetoacombinationofhighernonOPECsupplyand
OPECNGLs.OPECseffectivesparecapacityisestimatedat2.82mb/d,largelyunchangedfromlast
month.
OPEC and Non-OPEC Oil Supply
m b/d
Year-on-Year Change
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
-0.5
Oct 10 Jan 11 Apr 11 Jul 11 Oct 11 Jan 12
OP EC Crude
OP EC NGLs
Non-OP EC
Total Supply
m b/d
62
OPEC and Non-OPEC Oil Supply
m b/d
31.0
60
30.5
58
30.0
56
29.5
54
29.0
52
28.5
50
Jan 11
28.0
Jul 11
Jan 12
Non-OP EC
OP EC Crude - RS
Jul 12
OP EC NGLs
All world oil supply figures for January discussed in this report are IEA estimates. Estimates for OPEC
countries,Alaska,andRussiaaresupportedbypreliminaryJanuarysupplydata.
Note:RandomeventspresentdownsiderisktothenonOPECproductionforecastcontainedinthisreport.These
events can include accidents, unplanned or unannounced maintenance, technical problems, labour strikes,
politicalunrest,guerrillaactivity,warsandweatherrelatedsupplylosses.Specificallowancehasbeenmadein
the forecast for scheduled maintenance in all regions and for typical seasonal supply outages (including
hurricanerelatedstoppages)inNorthAmerica.Inaddition,fromJuly2007,anationallyallocated(butnotfield
specific)reliabilityadjustmenthasalsobeenappliedforthenonOPECforecasttoreflectahistoricaltendency
for unexpected events to reduce actual supply compared with the initial forecast. This totals 200kb/d for
nonOPECasawhole,withdownwardadjustmentsfocusedintheOECD.
10F EBRUARY 2012
15
S UPPLY
OPEC Crude Oil Supply

OPEC crude oil supply in January rose to 30.9mb/d, the highest level since October 2008, largely
reflectingthesteadyrampupinLibyanproductionaswellassustainedhighlevelsofoutputfromSaudi
Arabia, Kuwait and the UAE. The increase in Libyan production was partially offset by small monthly
declinesfromIraq,Kuwait,Angola,NigeriaandVenezuela.
OPECsupplywas900kb/doverthegroups30mb/dcollectiveoutputtargetagreedatitsmidDecember
ministerial conference in Vienna. After OPECs consensual meeting at yearend, Iranian Oil Minister
RostamQasemisharpenedtherhetoricinrecentweeksbywarningArabOPECmembersnottoincrease
productiontoreplaceanyIranianbarrelsshutoutofthemarketduetotightersanctionsonthecountrys
oil and banking sectors. As anticipated, on 23 January the EU implemented plans for an embargo on
Iranianoileffectivefrom1July,andafreezeontheassetsofthecountryscentralbank,largelyinline
withmorestringentsanctionsadoptedbytheUS.
ThecallonOPECcrudeandstockchangeisreducedby100kb/dforthefirsthalfoftheyear,with1Q12
now pegged at 29.8mb/d and 2Q12 at 29.2mb/d. The call for fullyear 2012 is also lowered by
100kb/d,to29.9mb/d,whichis0.7mb/dbelowthe2011averageof30.6mb/d,duetoacombination
ofhighernonOPECsupply(+0.9mb/d)andOPECNGLs(+0.5mb/d).OPECseffectivesparecapacityis
estimatedat2.82mb/dcomparedwith2.85mb/dlastmonth.
m b/d
31
OPEC Crude Oil Production
m b/d
32
Quarterly Call on OPEC Crude + Stock

Change
31
30
30
29
29
28
27
28
Jan
Mar
2009
May
2 0 10
Jul
Sep
2 0 11
Nov
26
Jan
1Q
2 0 12
Entire series based o n OP EC Co mpo sitio n as o f January 2009

o nwards (including A ngo la & Ecuado r & excluding Indo nesia)
2Q
3Q
4Q
2 0 10
2 0 11
2 0 12
Entire series based o n OP EC Co mpo sitio n as o f January 2009
o nwards (including A ngo la & Ecuado r & excluding Indo nesia)
Saudi Arabian crude supplies in January were unchanged at 9.85mb/d. Saudi Arabia has increased
output by 400kb/d since last October, with some of the extra volumes going to China. Saudi Aramco
reduced March official selling prices for Asian customers for the second month in a row, which some
market participants viewed as a signal that the Kingdom is prepared to offer competitively priced
alternativestoIranianbarrels.SaudiOilMinisterAlialNaimiwasonrecordassayingthecountrycould
"easilygetupto11.411.8mb/dalmostimmediately,inafewdays...allweneedistoturnvalves."The
ministersaiditwouldtakeAramcoaround90daystobringonanadditional700kb/dofcapacity.
UAE,IranianandQatarioutputwerealsounchangedinJanuary,at2.58mb/d,3.45mb/dand820kb/d,
respectively. Kuwaiti production slipped 40kb/d, to 2.56kb/d in January. That is 110kb/d below the
2.67mb/daverageforNovember,whenitisthoughtthecountrywastestingitscapacitylimits.
IraqiJanuarycrudeoilsupplyfellby40kb/d,to2.65mb/d,withlowerexportsofbothKirkukandBasrah
crude.TotalIraqiexportsweredown40kb/dto2.11mb/dlastmonth,withsouthernshipmentsoffby
25kb/dto1.71mb/d,andvolumesfromthenorthernexportterminalofCeyhanontheMediterranean
down15kb/dto395kb/d.BaghdadhadhopedtoboostBasraLightshipmentsto1.9mb/dinJanuary,
withthestartupofanew900kb/dsinglepointmooringintheGulfbuttechnicaldelayshavederailed
completionoftheexportfacility.Asaresultofcontinuingexportconstraints,wehavedowngradedour
expectationfora400kb/dincreaseinIraqicapacityfor2012,toaround250kb/d.
16
10F EBRUARY 2012
S UPPLY
OPEC Crude Production

Capacity
Spare Capacity
vs Jan 2012
Supply
3Q12 Average
Sustainable
Production
Capacity
3Q12 Production
Capacity Versus
1Q12 Capacity
1.29
1.30
0.01
1.37
0.06
1.73
1.90
0.17
2.10
0.20
0.48
0.48
0.51
0.03
0.54
0.03
3.55
3.45
3.45
3.51
0.06
3.56
0.04
2.67
2.60
2.56
2.84
0.28
2.84
0.00
0.55
0.75
0.98
1.00
0.03
1.21
0.21
Nigeria
2.10
2.06
2.04
2.45
0.41
2.48
0.02
Qatar
0.82
0.82
0.82
0.90
0.08
0.90
0.00
Saudi Arabia2
9.75
9.85
9.85
11.88
2.03
11.88
0.00
UAE
2.52
2.58
2.58
2.74
0.16
2.79
0.05
Venezuela4
2.53
2.50
2.48
2.54
0.06
2.63
0.09
27.97
28.13
28.26
31.57
3.31
32.27
0.70
Iraq
2.68
2.69
2.65
3.00
0.36
3.13
0.13
Total OPEC
30.64
30.82
30.90
34.57
3.67
35.40
0.83
Nov 2011
Supply
Dec 2011
Supply
Jan 2012
Supply
Algeria
1.29
1.29
Angola
1.69
1.75
Ecuador
0.50
Iran
2
Kuwait
Libya
OPEC-11
Sustainable
Production
1
(excluding Iraq, Nigeria, Venezuela and Libya

1
2
3
4
Capacity levels can be reached within 30 days and sustained for 90 days.
Includes half of Neutral Zone production.
Nigeria's current capacity estimate excludes some 200 kb/d of shut-in capacity.
Includes upgraded Orinoco extra-heavy oil assumed at 430 kb/d in January.
2.82)
Libyan output continued on an upward swing in January, rising by 225kb/d to an average 975kb/d,
based largely on preliminary tanker data. At endJanuary the National Oil Co (NOC) reported that
production hit 1.3mb/d and the governments latest forecast is for output to reach prewar levels of
1.6mb/dthissummer.Libyahassofarconsistentlyoutperformedindustryexpectations,yetanumberof
companiesoperatingtherearescepticalthatthishigherlevelwillbesustainedintheshorttermgiven
plannedmaintenanceandrepairworkonwellsandpipelines.Marathon,apartnerintheOasisGroup,
cautioned that output growth will likely be constrained by planned oilfield maintenance against the
backdrop of political unrest. Libya's Arabian Gulf Oil Company (AGOCO) reported that electricity
problems at the Messla and Sarir fields have delayed the planned ramp up there from 300kb/d to
425kb/d.CompletionofrepairsisnowexpectedinApril.
EscalatinginternalstrifeisnowseenasthebiggestrisktoLibyaachievingitsproductiongoals.Though
notunexpected,apoliticaldividebetweentheNationalTransitionalCouncil(NTC)andthediversetribal
regionsiswidening,withinternalcriticismofthecountrysnewleadershipbecomingacute.Inaddition,
outbreaksofviolenceinBaniWalid,aformerGaddafistronghold,andTripoliarethreateningthefragile
politicalstructure,accordingtoanewUNreport.Thedeeprootedlegacyofweakstateinstitutionsand
civilorganisationsismakingthecountrystransitionmoredifficult,accordingtoUNofficials.Asaresult,
the UN cautioned that there is an ever present possibility that similar outbreaks of violence could
escalateandwideninscope.
Nigerianproductionwasdown20kb/dto2.04mb/dinJanuary,duetomonthlongproblemswiththe
NembeCreektrunklineintheNigerDelta.ShellliftedtheforcemajeureonBonnyLightcrudeexportsin
earlyFebruaryafterrepairswerecompletedonthepipeline,damagedafterearlierincidentsofsabotage
and theft. The loss of Bonny crude was partially offset by the return of production from the offshore
Bongafield,afterpipelinerepairswerecompletedinearlyJanuary,aswellasstartupofEAfieldoutput
followingmaintenancework.
Venezuelan output slipped 20kb/d to 2.48mb/d, largely due to problems reactivating the
Petroanzoategui heavy crude upgrader after maintenance work. Ecuadors output was estimated at
480kb/d,unchangedfromDecemberlevels.
10F EBRUARY 2012
17
S UPPLY
Iranian Customers Start Lining Up Alternative Crude Supplies

InternationalsanctionstargetingIransexistingoilexportsdonotcomeintoeffectuntil1Julybuttheyare
already having an impact on crude trade flows in Europe, Asia and the Middle East. As anticipated, on
23January the EU adopted plans to ban oil imports from Iran and require all member countries to halt
financialtransactionswiththecountrysCentralBank.IntendedtoincreasepressureonTehrantohaltits
nuclear development programme, the EU measures follow a similar time line to new US sanctions
announced at the end of 2011. The grace period for implementing the embargo is designed to allow
membercountriestimetofindalternativesupplies.
Basedon2011exports,theEUembargocouldaffectupto600kb/dofsupplies,althoughbroaderUSandEU
economic sanctions on Irans Central Bank could be more pervasive if they successfully block the
predominantchannelforoilpaymentstoIran.Someestimatessuggestthatupto1mb/dofIrans2.6mb/d
ofexportsmaybereplacedbyalternativesuppliesoncesanctionsgointoeffect,eitherforcingthestateoil
companytoplaceunsoldbarrelsintofloatingstorageorshutinproductioninthesecondhalfoftheyear.
The market largely discounted retaliatory Iranian
threatstopreemptaEuropeanembargobycuttingoff
exports to EU countries immediately, though the
heightened rhetoric may have contributed to recent
pricestrength.Iranianofficialshavealsowarnedfellow
OPECproducersnottofillanygapcreatedbyIransloss
of market share but commercial imperatives are
expectedtoruletheday.
kb/d
Iranian Crude Imports, 2011
1500
3000
1250
2500
1000
2000
750
1500
500
1000
250
500
SaudiArabiasOilMinistersaidthecountrycouldeasily
0
0
increaseproductiontoaround11.8mb/dinamatterof
Jan-11
Apr-11
Jul-11
Oct-11
Total (right)
Japan/Korea
China/India
days, or about 2mb/d above our current production
Other non-IEA
Gre/It/Sp/Tur
Other Europe
estimateof9.85mb/d.Angola,theUAE,LibyaandIraq
are all expected to bring on new production capacity over the course of 2012, potentially as much as
850kb/d,whilenonOPECsupplyisexpectedtoreboundtothetuneofnearly1mb/din2012.
Although there are five months before restrictions on existing contracts take effect, European customers
havealreadycurtailedimportsofIraniancrudeandAsianbuyersareliningupalternativesourcesofsupply.
EuropeancustomersarelikelytolooktoRussia,IraqandSaudiArabiaforreplacementbarrels.China,the
singlelargestbuyerofIraniancrude(some550kb/dorabout20%ofexports),isthoughttobeliftingaround
halfof2011volumesduring1Q12,althoughthisisprobablymoretodowithadisputeoverprices.Although
Chinahasstronglyopposedsanctions,thestateoilcompaniesbargainingpositionwiththeNationalIranian
OilCo(NIOC)hasclearlybeenstrengthenedbytheinternationalmeasures.
The prospect of adequately supplied crude markets through 2012 is therefore lessening concerns over
EuropeanandAsiancustomersfindingsuitablealternatives.ChinahassteppeduppurchasesofSaudicrude,
reportedly buying an additional 200kb/d in recent months, though some of these extra volumes may be
destinedfornewlycompletedstrategicstorage.ChinaisalsobuyingmoreRussianESPOcrudeandAngolan
grades.IndiahasalsoincreasedpurchasesfromSaudiArabiaandreachedanagreementwithIrantopayfor
45% of its crude purchases in rupees. India last year bought 350kb/d from Iran. Other Asian buyers,
includingJapanandSouthKorea,areimportingrecordlevelsofcrudefromWestAfrica,especiallyAngolan
andNigeriangrades.WhilethesearegenerallylighterandsweeterthanIraniancrudes,increaseddemand
mayindicatethatregionalrefinersarehavingtoblendupfromnowheavierbaseloadsupply.
While there appears to be ample crude currently available in the market, the stricter sanctions are
nonetheless muddying the waters for the tanker industry. On 8 December 2011, Lloyds Joint War
Committee confirmed that Iran was deemed an area of enhanced risk of war, which led a number of
underwriterstochargehigherpremiumsforvesselscallingatIranianportsortransitingwithin12milesof
theIraniancoast.
18
10F EBRUARY 2012
S UPPLY
Non-OPEC Overview
NonOPECoilproductionisestimatedtohavefallenby0.2mb/dto53.2mb/dinJanuary,largelydueto
a seasonal downturn in global biofuels output, weather and mechanicalrelated field outages in the
NorthSea,andthetransitdisputebetweenSudanandSouthSudan.Thelatterconflictislikelytodent
nonOPEC output for the remainder of the first half of 2012 by around 240kb/d compared to 1H11
levels. The Sudan/South Sudan dispute adds to around 160kb/d of various unplanned field outages in
the North Sea and in other parts of the world (below). Oil production remains offline in China at the
offshorePengLaifield,andunresthasdentedoutputinYemenandSyriabyaround100kb/deach.
mb/d
1.5
Non-OPEC Supply - Yearly Change
kb/d
-50
1.0
0.5
-250
0.0
-450
-0.5
-650
-1.0
Non-OPEC Supply 2011 and 1Q12

Selected Shut-ins & Maintenance
-50
-140
-130
-130
-270
-180
-70
-190
-20
-160
-470
-590
-350
-360
-360
-850
-1.5
1Q11
3Q11
NAM
China
PG & Biofuels
1Q12
OECD EUR
Other Asia
Other
3Q12
FSU
LAM
Total
1Q11
2Q11
3Q11
4Q11
1Q12
Planned Maintenance (N. Sea)
Unplanned Outages (N.Sea)
Other Unplanned Outages
Astheremainderof2011datacomesin,4Q11supplyhasbeenrevisedupby70kb/dfromlastmonthas
higherUSfigureswerepartlyoffsetbylowerthanexpectedNorthSeaproduction.Withtheserevisions
incorporated,nonOPECoilsupplyisseentohavegrownby110kb/dto52.7mb/din2011.Yetthelast
monthhasseenthenonOPECsupplypicturefor1Q12takeaturnfortheworse,notablyforAfricaand
OECDEurope.ThesetrendsareagainoffsetbyhigherexpectationsofgrowthfromUSliquidsproduction.
WenowexpectnonOPECsupplytoshowannualgrowthof490kb/din1Q12,or270kb/dlessthanlast
monthsestimate,andreach53.2mb/d.NonOPECoilproductionin2012isonlyslightly(30kb/d)lower
thatlastmonthsestimateandshouldpostgainsofaround940kb/dtoaverage53.6mb/d.
On the one hand, unplanned outages at facilities operating near capacity levels and continued unrest
havethepotentialtocontinuetoplaguenonOPECsupplyin2012.Ontheotherhand,highpricesgive
operatorsanopportunitytomoreintensivelydeployexistingandnewtechnologies,suchashorizontal
drillingandEOR,toincreaseoilproductionfromexistingwells.Thelatteroccursalmostentirelyunder
theradar,butitmorethanoffsetsthemostpessimisticshutinscenariosandunderpinsourestimateof
substantialgrowthinnonOPECsupplyof0.9mb/din2012.Providedthatunplannedoutagesdoabate
fromexceptionalrecentlevels,normalisedperformance,evenfrommatureassets,holdsthepotentialto
generatehealthygrowthfromthestuntedbaselineof2011.
OECD
North America
USDecemberpreliminary,Alaskaactual,otherstatesestimated:UScrudeoilsupplystayedataround
5.8mb/dinDecember,some300kb/dhigherthanDecember2010.USNGLgrowthalsolikelyrebounded
by 130kb/d to 2.3mb/d in December, and biofuels output reached record levels of around 950kb/d
before the expiration of the ethanol tax credit. The most recent statelevel Petroleum Supply Monthly
data for September 2011 showed increases in production in Colorados Niobrara. Texas Eagle Ford oil
production(asdefinedbytheTexasRRC)fellbyaround25kb/dto110kb/d,ofwhicharound40%was
condensate. Light tight oil production has also boosted output to over 200kb/d in New Mexico, which
includespartsofthePermianandSanJuanbasins.Thestrongershowinghaveresultedinaslightupwards
revisiontothe2012estimate.LighttightoilgrowthinNorthDakotaandTexasaretheprimarysourcesof
10F EBRUARY 2012
19
S UPPLY
UScrudeoilproductiongrowthin2012,whichisexpectedtoincreaseby250kb/d(+4.5%)to5.9mb/d.
HigherthanexpectedproductioninNorthDakota,Texas,NewMexico,andColoradocauseanuptickof
0.1mb/dforthe2012crudeoutlookcomparedtolastmonth.Naturalgasplantliquidsproduction,which
accountedforover30%(or100kb/d)ofUSliquidsgrowthin2011,alsoreachedarecordhighof2.3mb/d
inNovember2011,andweexpecta30kb/dstrongerperformanceforthe2012outlook.
CanadaNovember actual: Rising output from the oil sands brought Canadian oil production to
3.7mb/din4Q11,around140kb/dhigherthan2010levelsandaround120kb/dabove3Q11.Canadian
oil production also benefited from a strongerthanexpected return to normal production at the
CanadianOilSandsSyncrudeproject,higherSuncoroutputfromtheFirebagproject,andthecompletion
of routine maintenance offshore Newfoundland. In fact, Canadian syncrude production likely reached
over 1.0mb/d for the first time in December, or around 300kb/d higher than June 2011 levels. The
Canadianoiloutlookfor2012isincreasedby90kb/dfromlastmonth,to3.7mb/d,totakeintoaccount
higherexpectationsforSuncoroutputandthefasttrackingofthe20kb/dSouthernPacificMcKayRiver
oil sands project. This year Canadian oil production should increase by around 230kb/d (or 6.6%)
comparedtolastyear.Latebreakingnewsofanunplannedshutdownatthe110kb/dHorizonoilsands
project has taken the project offline for 23 weeks. Although this is not explicitly incorporated in the
forecast this month, the forecast assumes 120 kb/d of downtime for mining and insitu Canadian
projects in the late spring and early summer. An even longer outage could be on the cards if CNRL
choosestoundergofurthermaintenancenowthathadbeendeferredto2013.
mb/d
0.80
mb/d
4.0
US Total Oil Supply - Yearly Change
0.60
3.8
0.40
3.6
0.20
3.4
0.00
3.2
-0.20
3.0
-0.40
1Q11
Alaska
Other Lower-48
Other
Canada - Total Liquids Supply
3Q11
1Q12
3Q12
California
Gulf of Mexico
Total
Texas
NGLs
Jan
Mar
May
2008
2010
2011 forecast
Jul
Sep
Nov
Jan
2009
2011
2012 forecast
Short-term Impacts of Keystone XL Decision

TheObamaadministrationrejectedTranscanadasSeptember2008requesttobuildthe700kb/dKeystone
XLpipelinefromAlbertatotheUSGulfCoastduetothearbitrarynatureofadeadlineimposedbytheUS
CongressinaDecember2011payrolltaxbill.IncrementalUStightoilandCanadianheavyoildestinedfor
KeystoneXLscapacitywillnowhavetofindalternativeroutesforexport.IntheUStheshorttermimpacton
production will be limited, as rail and alternative pipeline takeawaycapacity is rapidly increasing inNorth
Dakota, but the decision will likely lead to a more rapid reconfiguration of the US domestic pipeline
infrastructure.
In November, the US State Department decided that it had insufficient information to make a
recommendation to President Obama whether or not the crossborder Keystone XL pipeline was in the
national interest. The Department received many public comments from stakeholders and felt that an in
depth analysis would be required to evaluate alternative routes. The time required for that analysis
exceeded the 60day deadline that the US Congress required in its December 2011 legislation. Therefore,
President Obama accepted the State Departments recommendation to deny the presidential permit and
determinethatthepipelinewasnotinthenationalinterest.TheWhiteHousestressedthatthedecisionwas
notajudgementonthemeritsofthepipeline,anditdoesnotprecludeTransCanadafromsubmittinganew
proposal.Althoughthereviewprocesswouldhavetobeginagain,TransCanadastillhopestohavearevised
versionoftheprojectupandrunningby2014.
20
10F EBRUARY 2012
S UPPLY
Short-term Impacts of Keystone XL Decision (continued)

Impact on Canadian Crude: TransCanada transports roughly 150kb/d of West Canadian crude oil to
Midwestern(PADDII)andGulfCoast(PADDIII)refineriesandobtainedfirmlongtermcontractstotransport
380kb/dinadditionalsuppliestostorageatCushing,OklahomaandtoPADDIIandPADDIIIrefineriesvia
theproposedexpansion.RefinersinPADDIIIwereseekingtoreplacedecliningsuppliesofimportedheavy
crude with Canadian supplies. In the short term, the decision has caused Canadian producers and the
governmenttoswitchtheirfocusontoCanadianWestCoastexportoutlets,butthesetoohaveencountered
localopposition.
Growing US Rockies and Midwestern production has meant that PADD II refiners are now taking less
importedcrudefromtheUSGulfCoastviaeveremptierpipelinessuchasSeaway,Capline,andSpearhead.
Keystone XL would initially have relieved that function by bringing crude from Cushing to the Gulf Coast.
Operators are now likely to increase the flexibility in the US system so that Canadian heavy crudes can
satisfy incremental PADD III demand via various reversal plans. In the absence of either Keystone XL or a
pipelinetoCanadasWestCoast,Canadianproducerswillhavetoexportincrementalvolumestorefinersin
theMidwestandtheRockies,insteadoftoPADDIIIortoChina,incurringan$8/bblvaluelossinrevenue
accordingtoarecentWoodMackenzieassessmentfortheAlbertaDept.ofEnergy.
RAIL
Impact on Williston Basin Light Tight Oil

Williston Basin Production and Takeaway
Production: Keystone XL was expected to
kb/d
Capacity (2007-15)
provide65100kb/dofnewtakeawaycapacity 1800
Other Rail
Musket
for producers in the basin in light of 1600
Great Northern Midstream
constrained railcar availability and Enbridges 1400
Bakken Oil Express
pipelinecapacity.Inaddition,PADDIIrefiners
Hess Rail
1200
Rangeland Colt
are operating at 95% utilization rates in
Other Pipelines
1000
January,comparedto85%inPADDIII.Because
Plains Bakken North
Butte P/L Expansion and Loop
of these constraints in PADD II, refiners in 800
Enbridge Pipelines
PADDIIIwillbemorelikelytoprocesssurplus 600
Williston Basin Forecast
Williston basin crude and to fill up stocks at 400
Cushing with more expensive crudes, further 200
depressing WTI prices compared to other
0
crude oil benchmarks. Despite the projects
2007 2008 2009 2010 2011 2012 2013 2014 2015
rejection and the shortterm concerns listed
Source: IEA & N. Dakota Pipeline Authority, Jan. 2012
above,anannualaccountingsuggeststhatrail
andpipelinetakeawaycapacityareunlikelytoposeconstraintstoproducersinthemediumterm.Infact,
over550kb/dofnewtakeawaycapacityisplannedin2012,70%ofwhichisrailbased.Inaddition,trucks
are travelling to Canada to feed as much as 35kb/d of light tight oil into the main CanadaUS pipeline
systems.IntheabsenceofKeystoneXL,railbasedcapacityshouldaccountforoverhalfoftotaltakeaway
capacityby2015accordingtotheNorthDakotaPipelineAuthority.
Outlook: The Keystone XL decision has longerterm implications for Canadian producers and will result in
intensified Canadian efforts to find a West Coast outlet by the middle of this decade. In the meantime,
incremental Canadian and Williston Basin crude oil will still make its way to US refiners, as favourable
netbacksarelikelytopreventupstreamprojectcancellationsorseriousbottlenecks.
North Sea
ProductionfromtheNorthSeareboundedtoaround3.0mb/din4Q11,200kb/dhigherthantheprior
quarter,yetroughly380kb/dlowerthan4Q10.WeatherrelatedoutagesinUK,Norway,andDenmark
plagued productionduringthe last quarterand intothe currentquarter, keeping1Q12 productionat
around3.1mb/d.DespitenewsoftheUKsBuzzardfieldreturningtolevelsofmorethan200kb/dfor
short periods of time, average output for the months of December and January is likely to have
remainedbetween160kb/dand190kb/d.
In the UK, Octobers preliminary crude oil output data were revised downward by 60kb/d,
underpinninga140kb/dlower4Q11estimateof1.1mb/d.Additionally,BPreportedthatthe40kb/d
10F EBRUARY 2012
21
S UPPLY
FoinavenfieldwouldremainshutinFebruaryafteritdiscoveredasmallleakonaflowline.Gryphon,
Tullich, Maclure and the Gannett group of fields are likely to remain offline until 2H12 at best. In
Norway,4Q11maintenanceandrelatedturnaroundswereespeciallyheavyintheStatfjordarea.These
stoppages have constrained Norways production to 2.0 mb/d when most analysts were expecting a
postmaintenancerebound.Infact,Norways4Q11oilproductionincreasedbyonly35kb/dover3Q11
levelsand7%belowlastyearslevels.Insum,lingeringfieldproblemsandunscheduledmaintenancein
1Q12meanthatNorwayandtheUKsoutputisaround160kb/dlowerthannormaloutageratesfor
thistimeofyear.Wehaverevisedour2012outlookfortheNorthSealowerby130kb/dto3.0mb/d,
preferringtobesurprisedtotheupside.
mb/d
mb/d
Norway Oil Supply
1.7
2.7
UK Offshore Oil Supply
1.5
2.5
1.3
2.3
1.1
2.1
0.9
1.9
1.7
0.7
Jan
Mar
May
Jul
2008
2010
2011 forecast
Sep
Nov
Jan
2009
2011
2012 forecast
Jan
Mar
May
2008
2010
2011 forecast
Jul
Sep
Nov
Jan
2009
2011
2012 forecast
OECD Asia
AustraliaNovember actual: Australian oil production increased by around 20kb/d in November to
nearly 460kb/d. We expect that production in January will fall by around 40kb/d from Decembers
estimate to 470kb/d on the impact of Cyclones Heidi and Iggy, which have reduced output at the
Waenea/Cossack, Stybarrow, and Vincent fields as well as at the Mutineer/Exeter FPSO. Other field
additionsshouldraisetotalAustralianoiloutputby140kb/dyoyto570kb/din2012.
Non-OECD
Former Soviet Union
RussiaJanuaryactual:RecentdataforJanuaryshowoilproductionincreasedby50kb/dto10.7mb/d,of
which9.9mb/dwascrudeoil.Onanannualbasis,Januarysfigurestoodaround1.5%aboveJanuary2011
levels.Almostallofthemonthlygaincamefromanear40kb/dincreaseinGazpromcondensateoutput.In
January,RosneftsVankorfieldincreasedproductionby15kb/dtoaverage330kb/d,raisingthecompanys
outputto2.6mb/d.Weexpectproductionfromthisnewfieldtocontinueincreasingduring2012toover
400kb/d. Gazprom is set to inaugurate a new gas and gas condensate processing facility at the
Zapolyarnoye field, allowing the company to process an additional 75kb/d of condensate and keeping
annualRussianliquidsoutputgrowthnear1.2%.1Q12expectationsinRussiaaretemperedslightlyfrom
lastmonthsoutlookgiventheseverityofthewinter,whichweexpectcouldcutpowersuppliestoremote
oilproducingareasasitdidin2006.
FSUnetoilexportsstoodat8.8mb/dinDecember,theirlowestlevelsince4Q08andafallof320kb/d
comparedtoamonthearlier.Crudeshipmentsplummetedby270kb/dto6.4mb/dasseabornecargoes
dispatchedviaBlackSeaandBalticportsfellbyacombined400kb/d.Consequently,Transneftvolumes
fell by 260kb/d to 4.2mb/d. In the Black Sea, volumes of Azerbaijani and Kazakhstani crudes sent via
Novorossiysk contracted by a combined 100kb/d, while cargoes of Siberian Light shipped via Tuapse
declined by another 80kb/d. In the Baltic, Gdansks brief resurgence ended as loadings dried up, and
Primorskexportsdeclinedby70kb/d.IntheEast,loadingsofESPOfromKozminoreboundedby60kb/d
22
10F EBRUARY 2012
S UPPLY
to 330kb/d, and shipments of Vityaz and Sokol crudes from Sakhalin island remained low at below
250kb/d.OutsideTransneftssystem,flowsthroughtheCPCandBTCpipelineswerelowerthannormal
at620kb/dand640kb/d,respectively.Productexportsincheddownby30kb/dafterdeclinesinfueloil
(70kb/d mom) and gasoil (20kb/d mom) while other products (here including naphtha and
gasoline)deliveriesroseby60kb/d,despitethecontinued90%Russianexcisedutyonlightproducts.
Complete 2011 data indicate that FSU net exports contracted by a significant 350kb/d compared to
2010.Crudeshipmentsfellby260kb/dafterlowerKazakhstaniandAzerbaijanisuppliesoffsetincreased
Russianvolumes.FlowsthroughtheTransneftnetworkincreasedby180kb/dto4.2mb/d,largelyasa
result of the start up the ESPO pipeline spur to China which replaced railed deliveries. Loadings at
LukoilsVarandeyterminalfellto90kb/dduetoaprecipitousdeclineatLukoilsYuzhnoKhylchuyuskoye
field,whilstexportsfromSakhalinIandIIremainedstableatacombined280kb/d.Theintroductionof
the60:66taxregimeinRussiacurbedproductexportsin2011.Onanaverageannualbasis,totalproduct
shipmentsfellby80kb/dasa30kb/driseinfueloilwasoffsetbydropsingasoil(100kb/d)andOther
Products(10kb/d),theformeralsoaconsequenceoftighterRussianproductspecifications.
FSU Net Exports of Crude & Petroleum Products

2010
2011
1Q2011 2Q2011 3Q2011 4Q2011
Oct 11
Nov 11 Dec 11
Latest month vs.

Nov 11 Dec 10
Crude
Black Sea
2.10
1.93
2.06
1.87
1.87
1.92
1.85
2.05
1.85
-0.20
-0.33
Baltic
1.60
1.50
1.48
1.57
1.37
1.56
1.52
1.68
1.48
-0.20
-0.17
Arctic/FarEast
0.74
0.67
0.70
0.69
0.65
0.65
0.72
0.60
0.63
0.03
-0.13
BTC
0.77
0.70
0.72
0.76
0.69
0.64
0.68
0.61
0.64
0.03
-0.17
Crude Seaborne
5.22
4.80
4.96
4.89
4.58
4.77
4.77
4.94
4.60
-0.34
-0.80
Druzhba Pipeline
1.13
1.17
1.14
1.12
1.18
1.24
1.20
1.24
1.28
0.03
0.15
Other Routes
0.42
0.53
0.53
0.54
0.54
0.50
0.48
0.49
0.52
0.03
0.08
Total Crude Exports

Of Which: Transneft1
6.76
6.50
6.63
6.55
6.30
6.51
6.45
6.68
6.40
-0.27
-0.57
0.12
4.00
4.18
4.15
4.16
4.09
4.31
4.22
4.48
4.22
-0.26
Products
Fuel oil2
1.54
1.58
1.43
1.82
1.59
1.46
1.45
1.50
1.44
-0.07
-0.04
Gasoil
0.88
0.77
0.90
0.79
0.72
0.69
0.70
0.69
0.67
-0.02
-0.14
Other Products
0.43
0.42
0.48
0.53
0.36
0.32
0.36
0.27
0.34
0.06
-0.05
Total Product
2.85
2.77
2.81
3.14
2.66
2.47
2.51
2.47
2.44
-0.03
-0.23
-0.80
Total Exports
9.61
9.27
9.44
9.68
8.96
8.98
8.96
9.15
8.85
-0.30
Imports
0.06
0.07
0.06
0.06
0.08
0.06
0.05
0.05
0.08
0.02
0.00
Net Exports
9.55
9.20
9.39
9.62
8.88
8.92
8.91
9.09
8.77
-0.32
-0.80
Sources: Argus Media Ltd, IEA estimates

1
Transneft data exclude Russian CPC volumes.

Includes Vacuum Gas Oil
Latin America
BrazilDecemberactual:Braziliancrudeandcondensateproductioncontinuedtoclimbtorecordlevelsof
around 2.2mb/d in December 2011, following leaks at the Frade field and Marlim Sul P40 platform in
November. Output from the Lula field continued to increase by 10kb/d to 65kb/d in December, and
outputfromwelltestsintheBMS9concessioninthepresaltoftheSantosbasinreachedaround20kb/d
at the end of last year. However, in January Petrobras found a leak in the well and shut it in. Based on
government estimates, output from the presalt now constitutes 170kb/d or 8% of Brazils crude and
condensate production. A years worth of data show Brazils crude and condensate production rose by
50kb/dor2.5%in2011,to2.1mb/d,roughlyathirdofthegrowthexpectedfor2011ayearago.Fields
adding significant amounts of production this past year included Jubarte (+70kb/d), Frade (+20kb/d),
Marlim Leste (+20kb/d), and Cachalote (+45 kb/d). These increases were offset by declines at Marlim
(30kb/d),Roncador(40kb/d),andAlbacoraLeste(30kb/d).
ColombiaDecemberactual:Colombianoilproductionfellby30kb/dto930kb/dinDecemberbecause
ofattacksontheCaoLimnpipeline,workerstrikes,andtransportationrestrictions.Labourunrestin
10F EBRUARY 2012
23
S UPPLY
January dented production at EcoPetrols 30kb/d la Cira field, which is likely to keep Colombias
production at December levels. In 2012, Colombias oil output growth is expected to come from
increasingproductionattheCastillafield,whichshouldriseby40kb/dtoaround120kb/dbytheendof
theyear.ThegovernmentreportedthatoilrelatedFDIinColombiahassurgedto$7.1billionin2011,up
145%fromtheprioryear.
mb/d
2.4
2.3
2.2
2.1
2.0
1.9
1.8
1.7
1.6
Colombia Oil Supply
1.1
1.0
0.9
0.8
0.7
0.6
0.5
Jan
Mar
May
2008
2010
2011 forecast
mb/d
Brazil Crude + Condensate Supply
Jul
Sep
Nov
Jan
Jan
2009
2011
2012 forecast
Mar
May
2008
2010
2011 forecast
Jul
Sep
Nov
Jan
2009
2011
2012 forecast
Africa
Sudan and South Sudan: Over a Barrel Again

Newly independent South Sudanpledged to shut downits output completely after it failed to agree on a
revenuesharingschemewithSudan.SudanandSouthSudanproducedaround450kb/dduring1H11before
Southern Sudan declared independence on 9 July. This report for the first time carries differentiated
production levels for both countries beginning in July 2011. Based on field level analysis, we assess that
SouthSudanwasproducingroughly260kb/dinDecember,whileSudanproducedaround110kb/d.Inthe
absence of a foreseeable resolution, we have also reduced production estimates by around 200kb/d in
1Q12andby100kb/dfor2012,reflectinglandlockedSouthSudansexportconundrum.
Revenuesharingagreementbreaksdown.SinceSouthSudandeclaredindependence,atenuousrevenue
sharingschemepersistedinwhichSouthernSudanpaidSudaninkindfortheuseofitstransitpipelineand
theuseofitsport.Sudanlostaround75%ofitspre
Sudan and South Sudan Oil Output
independence revenues to the South. After the
500
SUDAN
Southssecession,thesharingagreementgaveSouth 450
Total Exports
Sudan 60% of the revenues from the Unity fields 400
Source: Lloyd's APEX
output (located in South Sudan) and around 25% of 350
the revenues from Block 2s output (located in 300
S.SUDAN
Sudan). Initially, Khartoum in the north was asking 250
200
for a $32$38/bbl transit fee. After a week of
Chinese Imports
150
Source: China OGP
negotiations in Addis Ababa, Ethiopia, South Sudan 100
hadoffered$1.7billiontoSudanandtransitfeesof
50
0
$0.630.69 a barrel for use of the two lines to Port
Sudan.Khartoumthendemanded$5.4billionincash
and $3/bbl. The latest African Union proposal
involves the South giving Sudan a direct cash transfer of $5.4 billion, plus transit fees worth up to
$1.1billion,coveringtheperioduntiltheendof2014.Reportsalsoindicatedthatthecashpaymentcouldbe
reducedinkindbysuppliesof35kb/dtoSudan'srefineries.
SouthSudans260kb/dcouldremainabsentfromworldmarketsforthenearfuture.TheUnityfieldand
otherrelatedfieldsinSouthSudanarelocatedwithinGNPOCsBlock1Aand1B.Theyareintegratedwith
GNPOCsproductionsystemforthefieldslocatedinBlock2inSudan,whichincludetheGrandHegligfield
anditssatellites.TheUnityfieldproducedaround80kb/dduringthefirsthalfof2011,oraround60%of
GNPOCs production. Crossborder gas lines for reinjection connect these fields, and GNPOCs Central
ProcessingFacilityislocatednearHeglig.Therefore,anysustainablerestartofproductionintheSouthwill
havetoaccountforthesefieldsjointoperation.
24
10F EBRUARY 2012
S UPPLY
Sudan and South Sudan: Over a Barrel Again (continued)

South Sudanese officials
assess that all 274 wells in
Blocks1,2,and4wereshut
by 25 January. In addition,
officials said that 600 wells
inBlock3and7,reportedly
producing around 130kb/d,
had reached a reduced
productionstage.Petrodar,
inwhichPetronasandCNPC
hold the major stakes, is
refusing Sudanese requests
to continue to send oil to
PortSudan.
Badtimingforadisruption.
China imported roughly
260kb/d of Sudanese and
South Sudanese crude oil in
2011, roughly 5.2% of total
imports, and is likely to see
themostacuteeffectsofthe
disruption. The loss of over
200kb/dofheavyandacidic
Dar Blend and light, sweet,
and waxy Nile Blend crude
oils is coinciding with strong
Asian demand for medium
and heavy crude oilnot to
mentionthethreattoIranian
suppliesfromheightenedUS
and European sanctions.
Elsewhere in Asia, Japans
direct crude oil burn to
replace nuclearfired power
is 150kb/d more than 1Q11
yoy, and cyclones have
shut in around 60kb/d of
Australian production. ONGC reportedly sold a cargo of Nile Blend crude at a $4.50/bbl premium to Minas
blend,arecord$2/bblincreasefromJanuary,andAsiancustomersarealsobiddingupthepricesofAustralian
grades.Inaddition,LowSulphurWaxyResidue(LSWR)crackshaveincreasedby$5.49/bblsinceDecember.
Outlook. On the one hand, both Sudan and South Sudan are almost entirely dependent on oil export
revenuesfortheireconomysoaquickresolutionwouldmakeeconomicsenseandwouldavoidtheneedfor
newtransportinfrastructure.FundingforanalternativepipelinetotheKenyancitiesofLamuorMombasa
(tothesouth)wouldrequiregreaterclarityonSouthSudansoilreservesandsecuritysituation.Eventually,
current and new South Sudanese oil could flow via routes that are exporting new oil production from
TullowsfieldsintheAlbertbasininUganda,whichwilladdaround150kb/dpost2014.
Thetwogovernmentsremainatloggerheadsduetoawholehostofotherbilateralissueswhichlingerafter
theSouthssecession.Inadditiontothetransitfeedispute,thesideshavenotagreedonthefinalborder
status of the Abyei region. Also, citizenship issues of displaced persons, ongoing ethnic conflict, and the
potential for Sudan to use its military force are inflaming tensions between the two countries amidst a
worseningeconomicsituation.Therefore,thenegotiationswhicharetorestarton10Februaryarenolonger
just about oil, but about the two states sovereignty. While it is impossible to predict the outcome, the
broadersetofeconomicandpoliticalfactorsatplaymeanthatthetwocountriesoiloutputwillremainat
riskatleastfortheremainderoftheyear.
10F EBRUARY 2012
25
OECD S TOCKS
OECD STOCKS
Summary
OECDindustryoilstocksfellby40.8mbinDecember,to2611mb,or57.2daysofforwarddemand
cover. The reduction in inventories, broadly in line with a fiveyear average 37.4mb draw for
December,widenedthedeficitversusthefiveyearaverageto29.0mb,from25.6mbinNovember.
OECDinventorylevelsthereforecameinbelowthehistoricalaverageforasixthconsecutivemonth.
Preliminary data indicate an 11.4 mb build in January OECD industry inventories, a weaker build
thanthefiveyearaverage43.2mb.Crudeoilstocksroseby19.7mb,largelyinNorthAmericaand
Europe. In the meantime, product inventories fell by 13.2 mb driven by a sharp decline in other
productsholdings.
mb
OECD Total Oil Stocks
2,850
2,800
2,750
2,700
2,650
2,600
2,550
2,500
Jan Mar May
Jul
Range 2006-2010
2010
OECD Industry Total Oil Stocks
mb
Relative to Five-Year Average
200
150
100
50
0
-50
Sep Nov
Jan
Avg 2006-2010
2011
-100
Dec 09
Jun 10
Pacific
Europe
Dec 10
Jun 11
Dec 11
North Am erica
OECD
New Chinese strategic storage capacity completed between 3Q11 and 1Q12 amounts to nearly
79mb.Thisisequivalenttoanincremental220kb/dofChinesecrudedemandwerethesitestobe
filledsteadilyoverthecourseof2012.Currenthighcrudepricesandtermstructuremayargueagainst
suchbuying,butadditionalcrudepurchasingcouldemergeifpriceorgeopoliticalfactorswarrantit.
OECD Inventories at End-December and Revisions to Preliminary Data

OECDindustryoilstocksfellby40.8mbto2611mbinDecember.Withthereductioninstocksbroadly
in line with a fiveyear average 37.4 mb draw, the deficit of inventories versus the fiveyear average
widenedto29.0mb,from25.6mbinNovember.Asaresult,inventorylevelsstandbelowthefiveyear
averageforasixthconsecutivemonth.Regionally,thesurplusofinventoriesversusthefiveyearaverage
in North America rose significantly, offset by a similar widening in deficit in Europe. OECD forward
demandcoverfellto57.2daysfrom57.9daysinNovember,butremained1.6daysabovethefiveyear
averageof55.6days.
Preliminary Industry Stock Change in December and Fourth Quarter 2011

December (preliminary)
(million barrels)
Pacific
Fourth Quarter 2011

N. Am
Europe
Total
N. Am
Europe
Pacific
Total
N. Am
Europe
Pacific
Total
Crude Oil
Gasoline
Middle Distillates
Residual Fuel Oil
Other Products
-6.3
8.1
3.3
-3.0
-5.5
-15.3
-0.9
4.8
-2.5
-0.4
0.2
-1.6
-7.7
-0.6
-4.8
-21.4
5.6
0.4
-6.2
-10.8
-0.20
0.26
0.11
-0.10
-0.18
-0.49
-0.03
0.16
-0.08
-0.01
0.01
-0.05
-0.25
-0.02
-0.16
-0.69
0.18
0.01
-0.20
-0.35
0.02
0.13
-0.09
0.02
-0.13
-0.22
0.05
0.03
-0.04
-0.03
-0.01
-0.03
-0.08
-0.01
-0.07
-0.21
0.15
-0.14
-0.03
-0.23
Total Products
Other Oils 1
Total Oil
2.9
-3.4
-6.8
1.0
-1.3
-15.6
-14.7
-3.9
-18.4
-10.9
-8.5
-40.8
0.09
-0.11
-0.22
0.03
-0.04
-0.50
-0.47
-0.12
-0.59
-0.35
-0.27
-1.32
-0.07
-0.12
-0.17
0.01
0.04
-0.17
-0.19
-0.04
-0.24
-0.26
-0.12
-0.58
1 Other o ils includes NGLs, feedsto cks and o ther hydro carbo ns.
26
10F EBRUARY 2012
OECD S TOCKS
Crudestocksdeclinedseasonallyby21.4mbto913mb,markingasixthstraightmonthofbelowaverage
readings. Crude holdings in Europe led the decline, falling by 15.3mb while OECD Pacific showed a
marginal gain of 0.2mb. Despite a continued increase in Libyan crude production, the backwardated
pricestructureencouragedEuropeanrefinerstorundowncrudeoilinventories.
Moreover, product inventories fell by 10.9mb, compared with a fiveyear average 1.6mb drop,
increasing the deficit against the fiveyear average to 14.3mb, from 5.0mb in November. Most of the
product stock draw stemmed from OECD Pacific, showing a 14.7mb fall, while product holdings in
EuropeandNorthAmericaroseby1.0mband2.9mb,respectively.Middledistillateinventoriesinthe
Pacificledthedecreasethere,fallingby7.7mbascoldwinterweatherattheendofthemonthfinally
drew down heating kerosene stocks. On the other hand, gasoline stocks in North America rose by a
significant8.1mbamidhigherproductionduringaseasonaltroughindemand.
OECD Crude Oil Stocks
mb
mb
1,040
OECD Total Products Stocks
1,510
1,460
990
1,410
940
1,360
890
Jan Mar May
Jul
Range 2006-2010
2010
1,310
Jan Mar May
Jul
Range 2006-2010
2010
Sep Nov
Jan
Avg 2006-2010
2011
Sep Nov
Jan
Avg 2006-2010
2011
OECD stocks were revised 4.7mb higher in November, upon receipt of more complete monthly
submissions from member countries. This implies a 9.6mb build in November inventory levels,
compared with preliminary estimates of a 4.1mb build. Upward adjustments were centred on OECD
PacificcrudeoilandNorthAmericangasolinestocks,whichwererevisedhigherby6.3mband3.5mb,
respectively.Lowerthaninitiallyestimatedfueloilstocksprovidedapartialoffset.
Revisions versus 18 January 2012 Oil Market Report

(millio n barrels)
North America
Crude Oil
Gasoline
Middle Distillates
Residual Fuel Oil
Other Products
Total Products
Other Oils 1
Total Oil
Europe
Pacific
OECD
Oct-11
Nov-11
Oct-11
Nov-11
Oct-11
Nov-11
Oct-11
Nov-11
-0.1
0.1
0.1
0.0
0.3
0.5
-0.2
0.2
0.9
3.5
-1.5
0.2
2.5
4.7
-3.3
2.3
-0.1
0.3
-1.0
0.0
0.0
-0.7
-0.1
-0.8
-2.0
-0.7
0.0
-1.6
-3.3
-5.6
2.2
-5.4
-0.3
0.0
0.0
0.0
0.0
0.0
0.1
-0.3
6.3
0.2
0.8
-0.1
-0.2
0.7
0.7
7.7
-0.5
0.4
-0.9
0.0
0.3
-0.1
-0.3
-0.9
5.2
2.9
-0.7
-1.5
-1.0
-0.1
-0.4
4.7
1 Other o ils includes NGLs, feedsto cks and o ther hydro carbo ns.
Preliminarydataindicatea11.4mbbuildinJanuaryOECDindustryinventories,aweakerbuildthanthe
fiveyear average 43.2 mb. Crude oil stocks rose by 19.7 mb, most of which stemmed from North
America and Europe. In the meantime, product holdings fell by 13.2 mb. North American other
productsinventoriesledthedeclinebyfalling12.5mb.Gasolinewastheonlyproductstockscategory
that showed a build, rising by 9.8mb but only to be offset by a 9.3mb decline in middle
distillateholdings.
10F EBRUARY 2012
27
OECD S TOCKS
Analysis of Recent OECD Industry Stock Changes

OECD North America
North American industry oil inventories fell by 6.8mb to 1326mb in December, nonetheless
representingashallowerdropthantheseasonalnormof28.4mb.Crudeoilholdingsdeclinedby6.3mb
onlowerimportsintotheUSasrefinersdeferredtankerarrivalstoreduceendyeartaxliabilities.Other
oils stocks, including feedstocks, also fell by 3.4mb. Meanwhile, product inventories rose by 2.9mb
driven by an increase in gasoline holdings. Gasoline inventories rose by 8.1mb due to higher refinery
production. The need to sustain middle distillate production kept gasoline supply higher, even in the
midstoflowseasonaldemand.Gasolineinventorieshavenowbeenabovethefiveyearrangeforfour
successivemonths.Middledistillatestocksalsoincreasedby3.3mb,asrefinersrampedupproduction
whileexportsdecreased.Inthemeantime,fueloilandotherproductsholdingsdeclinedby3.0mband
5.5mbrespectively,providingapartialoffsettoincreasesamongthemainproducts.
OECD North America Crude Oil

Stocks
mb
550
750
500
700
450
650
400
Jan
Mar May
Jul
Range 2006-2010
2010
Sep Nov
Jan
Avg 2006-2010
2011
OECD North America Total Products

Stocks
mb
600
Jan
Mar May
Jul
Range 2006-2010
2010
Sep Nov
Jan
Avg 2006-2010
2011
US weekly data point to an 11.4mb increase in US industry stocks in January, in line with a fiveyear
average 12.6mb rise. Crude holdings rose by 8.1mb, amid lower refinery runs and as US refiners re
entered the market after endyear stock minimisation. In the meantime, crude levels at Cushing,
Oklahomaroseby1.1mbto30.4mb,reboundingabovethefiveyearaverageafterstandingbelowitfor
asecondconsecutivemonthinDecember.A5.4mbincreaseinotheroilsstocksaddedtotheUSstock
buildinJanuary.
US Weekly Total Industry Stocks
mb
1,200
mb
45
1,150
40
1,100
35
US Weekly Cushing Crude Stocks
30
1,050
25
1,000
20
950
15
900
Jan
Apr
Range 2007-2011
2011
Jul
Oct
5-yr Average
2012
Source: EIA
10
Jan
Apr
Jul
Range 2007-11
2011
Oct
5-yr Average
2012
US product inventories fell by 2.0 mb in January, driven by a draw in other products stocks. Other
productsholdingsplungedby12.5mbduetotheincreaseduseofpropaneforheating.Inthemeantime
gasoline holdings rose by 10.1mb, offsetting much of the other products loss. Although gasoline
production in January dropped significantly, the stock build followed fourweek average gasoline
demanddecliningtothelowestlevelsinceFebruary2001.
28
10F EBRUARY 2012
OECD S TOCKS
OECD Europe
Industry oil inventories in Europe fell by 15.6mb in December to 896mb, in contrast with a fiveyear
average 11.2mb build. This counterseasonal monthly draw widened the deficit versus the fiveyear
averageto66.4mb,from39.6mbin November,holdingstocklevelsbelowthehistorical rangeandat
their lowest since February 2003. Crude stocks counterseasonally plummeted by 15.3mb to 288mb,
marking the lowest level since August 1997 and a tenth straight month under the fiveyear range.
Despite a rapid increase in Libyan crude production, a backwardated price structure encouraged
Europeanrefinerstorundowncrudeoilinventories.Itisworthnoting,howeverthatcrudestockslook
less tight when measured against forward demand, and at 21.0 days of forward cover stand only just
belowthefiveyearrange.Inthemeantime,Europeanrefinedproductholdingsroseby1.0mbonhigher
refinery runs. Middle distillates led the increase, rising by 4.8mb while gasoline, fuel oil and other
products holdings declined by 0.9mb, 2.5mb and 0.4mb, respectively. Meanwhile, German enduser
heatingoilstocksfellby2percentagepointsto57%fillatendDecember.
mb
OECD Europe Crude Oil Stocks
362
days
25
342
24
322
23
22
302
282
Jan
OECD Europe Crude Oil Stocks

Days of Forward Demand
21
Mar May
Jul
Range 2006-2010
2010
Sep Nov
Jan
Avg 2006-2010
2011
20
Jan
Mar
May
Jul
Range 2006-2010
2010
Sep
Nov
Jan
Avg 2006-2010
2011
Preliminary data from Euroilstock point to a 1.5 mb stock build in the EU15 and Norway in January.
Despite a seasonal increase, they are far short of the fiveyear average build of 21.1mb. Crude oil
inventoriesledtheincrease,risingby8.1mb.Refinedproductholdings,however,fellby6.7mbduetoa
sharp decline in middle distillate stocks. Middle distillate holdings decreased by 7.4mb on a seasonal
increaseinheatingoiluse.Inthemeantime,gasolinestocksalsodeclinedby1.2mbwhilefueloiland
other products holdings rose by 0.7mb and 1.3mb, respectively. Refined product stocks held in
independent storage in Northwest Europe rose amid expectations of a seasonal boost in heating oil
demand.
OECD Pacific
CommercialoilinventoriesintheOECDPacificfellseasonallyby18.4mbto389mbinDecember,close
to the fiveyear average drop of 20.2mb. The deficit of inventories versus the fiveyear average
narrowed to 13.9mb, from 15.8mb in November. Crude was the only stocks category that showed a
build.Althoughcrudeholdingsedgedupcounterseasonallyby0.2mbto156mb,theyremainedunder
the fiveyear range for a third consecutive month. In the meantime, product stocks fell seasonally by
14.7mb, staying barely within the historical range. Middle distillate holdings led the decline, falling by
7.7mbascoldwinterweatherattheendofthemonthfinallydrewonheatingkerosenestocks.Other
products,gasolineandfueloilholdingsdeclinedby4.8mb,1.6mband0.6mb,respectively.
10F EBRUARY 2012
29
OECD S TOCKS
OECD Pacific Crude Oil Stocks
mb
mb
191
221
181
201
171
181
161
161
151
Jan
Mar May
Jul
Range 2006-2010
2010
OECD Pacific Total Products Stocks
141
Jan
Sep Nov
Jan
Avg 2006-2010
2011
Mar May
Jul
Range 2006-2010
2010
Sep Nov
Jan
Avg 2006-2010
2011
Weekly data from Petroleum Association of Japan (PAJ) suggest a counterseasonal drop of 1.6mb in
Japanese industry oil inventories in January. Crude oil stocks rose by 3.5mb, likely on higher crude oil
imports.Productstocksfellby4.6mbdrivenbyafurtherdropinkeroseneholdings.Acoldspelldrove
kerosene stocks down by 4.2mb. Gasoline inventories increased by 0.9mb while fuel oil stocks edged
downby0.1mb.
mb
mb
35
Japan Weekly Crude Stocks
130
Japan Weekly Kerosene Stocks
30
120
25
110
20
100
15
90
10
Source: PAJ
80
Jan
Source: PAJ
Apr
Jul
Range 2007-11
2011
Oct
5-yr Average
2012
5
Jan
Apr
Jul
Range 2007-11
2011
Oct
5-yr Average
2012
Recent Developments in Singapore and China Stocks

According to China Oil, Gas and Petrochemicals (OGP), Chinese commercial oil inventories rose in
Decemberbyanequivalentof2.5mb(dataarereportedintermsofpercentagestockchange).Crudeoil
stocks fell for a third consecutive month, by 2.2% (4.7mb). Record high refinery throughput, lower
imports and a sharp increase in crude exports led the decline. High refinery runs amid an overall
flattening in demand growth drove product stocks higher, by 6.1% (7.3mb). Gasoline, diesel and
keroseneinventoriesincreasedby1.4%(0.8mb),10.2%(6.0mb)and4.9%(0.5mb),respectively.
mb
10
China Monthly Oil Stock Change*
mb
Singapore Weekly Residue Stocks
30
25
20
15
10
(5)
(10) So urce: China Oil, Gas and P etro chemicals
Jun 11
Aug 11
Oct 11
Dec 11
Crude
Gasoline
Gasoil
Kerosene
*Since A ugust 2010, COGP o nly repo rts percentage sto ck change
30
5
Jan
Source: Int ernat ional Ent erprise
Apr
Jul
Oct
R a nge 2 0 0 7 - 2 0 11
5 - yr A v e ra ge
2 0 11
2 0 12
10F EBRUARY 2012
OECD S TOCKS
Chinas SPR Expansion: Potentially Boosting 2012 Crude Demand

Owing to the absence of comprehensive enduser consumption data, the OMR makes an assessment of
Chinese apparent oil demand based on refined product output and net oil products imports. This is
consistentwiththemeasureofproductsbasedoildemandpresentedforothercountries.However,itdoes
notcapturepotentialswingsinChinesecrudeoildemandcausedbychangesinstrategicstorage.Chinahas
beencontinuingtheconstructionofthesecondphaseofitsStrategicPetroleumReserve(SPR),thefillingof
which,dependentonpriceandbuyingschedule,couldmateriallyaffectChinesecrudeoildemandin2012.
In2008,ChinacompletedbuildingofthefirstphaseofitsSPR(SPR1)fourstoragefacilitieswithcapacity
of 103 mb and filled them with crude oil by April 2009. Although the Chinese government has yet to
officiallyannouncethelocationsandcapacitiesofthecrudestoragesitesforSPR2,unofficialnewsreports
identifyeightstoragefacilitieswithatotalcapacityof169mb.Amongthem,theDushanziandLanzhousites
(bothwith18.9mbcapacity)werereportedlycompletedinthesecondhalfof2011andJinzhou(18.9mb)
andTianjin(22.0mb)aresettobecompletedduringtheearlypartof2012.Again,accordingtounofficial
reports,theremainingfourSPR2sitesareexpectedtobecomeoperationalbyearly2013. ForSPR3,China
aims to construct further capacity of nearly 230 mb to boost total SPR capacity to approximately 500 mb
by2016.
Chinese Strategic Petroleum Reserve Sites
(million barrels)
Operator
Location
Sinopec
Zhenhai, Zhejiang
32.7
Filled
3Q06
Sinochem
Zhoushan, Zhejiang
31.4
Filled
4Q07
Sinopec
Huangdao, Shandong
20.1
Filled
4Q07
CNPC
Dalian, Liaoning
18.9
Filled
4Q08
Phase 1
Capacity Status
103.2
Completion
2008
CNPC
Dushanzi, Xinjiang
18.9
Completed and ready to be filled
3Q11
CNPC
Lanzhou, Gansu
18.9
Completed and ready to be filled
4Q11
CNPC
Jinzhou, Liaoning
18.9
Under construction
1Q12
Sinopec
Tianjin
22.0
Under construction
1Q12
Other
90.3
2013
Phase 2
169.0
2013
Phase 3
227.8
2016
Total SPR
500.0
Ifthesereportsarecorrect,thenupto79mbofnewstoragefacilitieswouldbeavailabletoreceivecrudein
2012. Notionally, this would imply 220 kb/d of crude demand if they were filled steadily throughout the
year. However, in reality, the pace of buying will be influenced by market conditions, and there may be
disincentivestofillthereservecurrently,givenprevailinghighpricesandbackwardatedmarketstructure.
Equally, however, purchasing could accelerate if prices weaken, if there is a perceived need to rapidly fill
emptystoragecapacityorifdistressedcargoesbecomeavailableintheAsianmarketfollowingtighteningEU
andUSsanctionsagainstIran.
Singaporeonshoreinventoriesroseby1.9mbinJanuary,drivenbyanincreaseinfueloilholdings.Fuel
oilstockssurgedby2.8mb,reboundingfromatwoandahalfyearlowinthemiddleofthemonth.A
highvolumeofarbitragecargoeswasreportedflowingintoSingaporefromtheWest.Inthemeantime,
gasoline stocks edged down by 0.3mb on strong demand from Indonesia and middle distillate
inventories fell by 0.6mb as surplus Indian cargoes, which might have gone to Singapore otherwise,
headedtoEurope,wherethestructuraldeficitisbeingexacerbatedbylowerrefiningcapacity.
10F EBRUARY 2012
31
OECD S TOCKS
Regional OECD End-of-Month Industry Stocks

(in days of forward demand and millions barrels of total oil)
Days1
Days
Million Barrels
mb
1,450
North America
60
58
1,400
56
1,350
54
North America
1,300
52
1,250
50
48
1,200
46
1,150
Jan
Mar
May
Jul
Range 2006-2010
2010
Days
72
Sep
Nov
Jan
Jan
Mar
May
mb
1,020
Europe
70
1,000
68
980
66
960
64
940
62
920
60
900
58
Jul
Range 2006-2010
2010
Avg 2006-2010
2011
Sep
Nov
Jan
Avg 2006-2010
2011
Europe
880
Jan
Mar
May
Jul
Range 2006-2010
2010
Days
58
Sep
Nov
Jan
May
mb
480
Pacific
Jul
Sep
Nov
Jan
Avg 2006-2010
2011
Pacific
460
440
52
420
50
400
48
46
380
44
360
Mar
May
Jul
Range 2006-2010
2010
Days
62
Sep
Nov
Jan
Jan
Avg 2006-2010
2011
Mar
May
Jul
Range 2006-2010
2010
mb
2,850
OECD Total Oil
Sep
Nov
Jan
Avg 2006-2010
2011
OECD Total Oil
2,800
60
2,750
58
2,700
56
2,650
54
2,600
52
2,550
2,500
50
Jan
Mar
Range 2006-2010
2010
56
54
Jan
Jan
Avg 2006-2010
2011
Mar
May
Range 2006-2010
2010
Jul
Sep
Nov
Avg 2006-2010
2011
Jan
Jan
Mar
May
Range 2006-2010
2010
Jul
Sep
Nov
Jan
Avg 2006-2010
2011
1 Days of forward demand are based on average demand over the next three months
32
10F EBRUARY 2012
P RICES
PRICES
Summary
AnuneasybalancecharacterisedoilmarketsthroughmuchofJanuary,despiteasharpescalationin
internationaltensionssurroundingIran.OilpricesseemtohaverisenonlymarginallyontheIranian
issue,butitwastheonsetofwinterweatherthatfuelledpricesforinternationalbenchmarkBrent
to sixmonth highs in early February. Brent was last trading around $117.50/bbl. By contrast, rising
stocksattheregionalCushingstoragedepotpressuredWTIpriceslowerinearlyFebruary,lasttrading
around$99.50/bbl.
AstheBrentWTIpricedifferentialsurgedtolevelsnotseensincelastSeptemberspeaks,theratio
ofBrenttoWTIfuturesopeninterestclimbedto57%inJanuary.OpeninterestinICEBrentcontracts
surpassed1millioncontractson26January2012anditisexpectedtorisefurther.
Product crack spreads increased across the board in January, with differentials for gasoline and
naphtha at the top of the barrel, and fuel oil at the bottom of the barrel, increasing the most.
Middledistillatemarketsarestillstrong,butmovedwithinasmallerrangeoverthemonth,exceptfor
intheUS,wherecrackspreadsimproved.
Benchmark crude tanker rates experienced a sharp downturn in late January and early February,
although they still held above their 3Q11 lows. The VLCC Middle East Gulf Japan route initially
ralliedtoover$17/mtonbriskpreChinesenewyearholidaytrading,butmarketactivityeasedagain
astonnagebuilt,notablyfromnewbuildsarrivinginthemarket,andratesplungedagain.
$/bbl
Crude Futures
Front Month Close
130
116
Source: ICE, NYMEX
120
108
100
104
90
100
80
96
Apr 11
Jul 11
NYMEX WTI
Oct 11
Source: ICE, NYMEX
92
Jan 12
ICE Brent
3February2012
112
110
70
Jan 11
NYMEX WTI & ICE Brent

Forward Price Curves
$/bbl
M1 2
NYMEX WTI
9 10 11 12
ICE Brent
Market Overview
CrudeoilfuturestradedinahigherrangeduringJanuaryasnewEUsanctionsonIranianoilimportsand
regulationsthatessentiallyblockmembercountriesfromtransactingbusinesswiththecountryscentral
banktriggeredretaliatoryrhetoricfromTehran.InJanuary,futurespricesforBrentpostedanincreaseof
around $3.75/bbl to an average $111.45/bbl, while WTI rose by about $1.75/bbl to an average
$100.32/bbl.
By early February, cold weather in Europe fuelled stronger demand and propelled North Sea Brent
futures up by a further $6/bbl over January levels, last trading around $117.50/bbl. By contrast, rising
stocks at the key Cushing storage depot, the delivery point for the NYMEX contract, added downward
pressureonWTI,lasttradingaround$1/bblbelowJanuarylevels,at$99.50/bbl.
10 F EBRUARY 2012
33
P RICES
Despite tougher new sanctions by the international community, the market is largely still taking the
situationinitsstride.Althoughthenewmeasureswillnotgointoeffectuntil1July2012,refinersand
tradersarealreadyliningupalternativesourcesofsupply.Indeed,thedelayedtimelinewasdesignedto
allow traditional buyers of Iranian crude a grace period of around five months to secure crude
replacements(seeSupply,IranianCustomersStartLiningUpAlternativeCrudeSupplies).
While there appears to be ample crude on offer in the market, the new, stricter sanctions are
nonethelesscausingsignificantproblemsforthetankerindustry,withratesforvesselscallingatIranian
portsrunningatapremiumandtalkofinsurersshyingawayaltogetherfromprovidingcoverforvessels
thathaverecentlycalledatIranianports.Asaresult,atwotiertankermarketisemerging.
US$/bbl
120
110
NYMEX WTI vs S&P 500
Index
1500
Source: NYMEX
110
1400
100
70
60
Jan 10
Jul 10
Jan 11
NYMEX WTI
Jul 11
Source: ICE, NYMEX
75
90
1200
80
80
80
85
1100
70
1000
60
Jan 10
Jan 12
S&P 500 (RHS)
Index
70
100
1300
90
NYMEX WTI vs US Dollar Index
US$/bbl
120
90
Jul 10
NYMEX WTI
Jul 11
Jan 12
US Dollar Index (inversed RHS)
Higher prices spurred on by geopolitical concerns with Iran and turmoil in Syria were tempered by
persistent concerns about the worsening euro zone debt crisis and an acrosstheboard downgrade in
globalGDPforecastsbytheInternationalMonetaryFund(IMF).TheIMFcutits2012forecastforglobal
economic growth to 3.3% from 4% and, indeed, this reports downward demand revisions reflect the
lowerprojections.Globaloildemandfor2012hasbeenrevisedlowerby0.2mb/dto89.9mb/d,with
growthnowexpectedtoaverage0.8mb/dthisyear.Despitemoreencouragingeconomicsignalsfrom
within the US, WTI prices remain under severe pressure from swelling stocks at Cushing, rising crude
flowsfromCanadaintotheMidcontinentand higheroutputofBakkencrudefromNorthDakota.Asa
result,theBrentWTIpricedifferentialsurgedtolevelsnotseensincepeakinglastOctober.
Thelatearrivalofwinterweatherisalsoprovidingunexpectedsupportforthecrudemarket.Fearsofgas
shortages in Europe have raised the prospect of increased oil burn at power plants, with Italy already
putting in place some alternative plans to start up some oilfired plants. Indeed, despite some rather
grim demand data for December, refining margins rose significantly in all major regions, albeit related
moretoconcernsoverproductsupplythanexpectationsofsustaineddemandstrength.
$/bbl
Jan 11
NYMEX WTI vs ICE Brent

$/bbl
10
0
-5
-10
-15
-5
-20
-10
-25
-30
Jan 11
-15
Jan 11
Source: ICE, NYMEX
Apr 11
Jul 11
Oct 11
Jan 12
34
Crude Futures
Forward Spreads
Source: ICE, NYMEX
Apr 11
WTI M1-M12
Jul 11
Oct 11
Jan 12
Brent M1-M12
10 F EBRUARY 2012
P RICES
Brent futures prices remained backwardated in January, whereby prompt prices are stronger than
furtherout.However,BrentM1M12backwardationwasrelativelyunchangedinJanuaryat$3.65/bbl,
compared with $3.70/bbl in December although the differential widened again in early February on
strongerpromptpricesfortheNorthSeamarker,likelydrivenhigherbycoldweatherdemand.
Bycontrast,weakpromptdemandforWTIsawtheWTIM1M12contractmovedeeperintocontango,
with the earlyFebruary differential running at around $2.95/bbl compared with $0.18/bbl in January
and$1.13/bblinDecember.
Prompt Month Oil Futures Prices

(monthly and weekly averages, $/bbl)
Nov
NYMEX
Light Sweet Crude Oil
97.16
RBOB
108.50
No.2 Heating Oil
128.63
No.2 Heating Oil ($/mmbtu)
22.08
Henry Hub Natural Gas ($/mmbtu)
3.56
ICE
Brent
110.49
Gasoil
129.27
Prompt Month Differentials
NYMEX WTI - ICE Brent
-13.33
NYMEX No.2 Heating Oil - WTI
31.47
NYMEX RBOB - WTI
11.34
NYMEX 3-2-1 Crack (RBOB)
18.05
NYMEX No.2 - Natural Gas ($/mmbtu 18.53
ICE Gasoil - ICE Brent
18.78
Source: ICE, NYMEX
Dec
98.58
109.14
122.13
20.97
3.25
Jan
Jan-Dec
% Week Commencing:
Avg Chg Chg 02 Jan 09 Jan 16 Jan
23 Jan 30 Jan
100.32
117.45
127.94
21.96
2.71
1.74
8.31
5.81
1.00
-0.54
1.7
7.1
4.5
4.5
-19.9
102.39
115.73
128.49
22.06
3.03
100.44 100.04
115.59 117.57
128.69 126.79
22.09
21.77
2.82
2.41
99.44 97.81
119.20 121.24
127.49 128.75
21.89 22.10
2.62
2.53
107.72 111.45
124.05 128.54
3.73
4.50
3.3
3.5
112.91
129.18
111.93 110.96
130.17 127.64
110.53 111.99
127.45 128.56
-10.52
26.10
13.34
17.60
19.03
16.27
-11.49
28.25
15.15
19.51
19.27
18.23
-11.10
28.05
19.76
22.52
19.27
16.91
-9.15
23.56
10.57
14.90
17.72
16.32
-11.13
27.62
17.13
20.63
19.26
17.09
-1.99
4.06
6.56
5.73
1.54
0.77
-10.92
26.75
17.53
20.60
19.36
16.68
-14.17
30.94
23.43
25.93
19.57
16.58
Futures Markets
Activity Levels
The ratio of Brent futures contracts traded on the
Percentage of Brent to WTI Open Interest
London ICE to WTI contracts in New York and London %
combinedclimbedto57%inJanuary,morethanan18% 80
increase since July 2011, triggered by a persistent
60
decline in open interest in ICE WTI contracts and an
increaseinBrentopeninterest.Bothvolumeandopen 40
interest have been consistently declining in ICE WTI
contracts. However, the upward trend in the ratio of 20 Source: ICE, CFTC
Brent to WTI open interest is also present when we
0
Jul-11
Sep-11
Nov-11
Jan-12
exclude ICE WTI contracts from our calculation. The
ratio of ICE Brent to CME WTI open interest reached
Brent/WTI (ICE+CME)
Brent/WTI (CME)
more than 73% on 24 January 2012, compared to just
over50%inJuly2011.
OpeninterestinNewYorkCMEWTIfuturesandoptionscontractsincreasedbylessthan1000contracts
from 3 January 2012 to 31 January 2012, reaching 2.32 million contracts. Meanwhile, open interest in
futuresonly contractsincreasedby1.96%duringthesameperiod,from1.37milliontoathreemonth
high of 1.4 million. Over the same period, open interest in London ICE WTI contracts dropped to
0.36millionand0.42millioncontractsinfuturesonlyandcombinedcontracts,respectively.Asopposed
10 F EBRUARY 2012
35
P RICES
toopeninterestinICEWTIcontractsinLondon,openinterestinICEBrentcontractspeakedatitshighest
levelat1.0and1.12millioncontractsinfuturesonlyandcombinedcontracts,respectively.
With relatively stable prices for New York CME WTI contracts, money managers barely increased their
bets on rising WTI crude oil prices by 2890 contracts in January, to a twomonth high of
172921contracts.However,WTItradersinLondonincreasedtheirnetlongpositionbymorethan66%
toasixmonthhighof24294contracts.Overthesameperiod,moneymanagersreducedtheirbetson
risingBrentpricesby10.5%from94315to84417contracts.
'000
Contracts
NYMEX WTI Mth1
'000
Contracts
$/bbl
Open Interest
1,600
120
1,500
100
1,400
1,100
Source: CFTC, NYMEX
150
100
95
90
-150
40
-250
85
06 Dec
1,000
20
Jan 09 Jul 09 Jan 10 Jul 10 Jan 11 Jul 11 Jan 12
Open Interest
$/bbl
105
Source: CFTC, NYMEX
-50
60
1,200
250
50
80
1,300
Net Positions in WTI Futures
20 Dec
03 Jan
Producers
Money Managers
Non-Reportables
NYMEX WTI Mth1
17 Jan
31 Jan
Swap Dealers
Other Reportables
NYMEX WTI
Producersreducedtheirnetfuturesshortpositionsfrom99231to85660contractsinJanuary;theyheld
19.78%oftheshortand13.66%ofthelongcontractsinCMEWTIfuturesonlycontracts.Swapdealers,
whoaccountedfor27.18%and35.46%oftheopeninterestonthelongsideandshortside,respectively,
increased their net short position by 58.8% to hold 115 800 net short in January. Producers trading
activityintheLondonWTIcontractsalsofollowedasimilarpatternasCMEWTIcontracts.Producersin
theLondonICEWTIcontractsincreasedtheirnetlongpositionscontractsfrom5890to20199contracts
overthesameperiod.Swapdealers,ontheother hand,increasedtheirnet shortpositionsduringthe
sameperiodto47011from40694contracts.
NYMEXRBOBfuturesandcombinedopeninterestincreasedbymorethan16%inJanuary.Openinterest
inNYMEXheatingoilfuturescontractsincreasedby2.04%to274900contractswhileopeninterestin
naturalgasmarketsincreasedby18.41%toreachanalltimehighof1.2millioncontracts.
IndexinvestorslongexposureincommoditiesinDecember2011declinedby$24.4billion.Meanwhile,
they cut their long exposure by $9.8billion from WTI Light Sweet Crude Oil, both on and off futures
contractsinDecember.Thenumberoffuturesequivalentcontractsdippedto603000,thelowestsince
Juneof2009,equivalentto$59.6billioninnotionalvalue.
Positions on NYMEX Light Sweet Crude Oil (WTI) Futures Contracts

Thousand Contracts
31 January 2012
Producers' Positions
Swap Dealers' Positions
Money Managers' Positions
Others' Positions
Non-Reportable Positions
Open Interest
Source: CFTC
36
Long
Short
191.3
175.2
212.1
109.1
85.9
276.9
291.0
39.2
111.3
55.1
Net
-85.7
-115.8
172.9
-2.2
30.8
1399.9
Long/Short
Short
Short
Long
Short
Long
Net from Prev.
Net Vs Last
Week
Month
-0.1
3.9
-2.5
-4.7
3.3
58.1
19.0
-57.1
7.4
18.7
12.0
74.3
10 F EBRUARY 2012
P RICES
Market Regulation
On21January2011,theUSCourtofAppealsfortheDistrictofColumbiaCircuitsidedwiththeUSCFTCs
argumentthattheInternationalSwapsandDerivativesAssociation(ISDA)andtheSecuritiesIndustryand
Financial Markets Association (SIFAM) challenge to CFTCs position limit rule must first be heard by a
lowercourt.Industrygroupshadalsofiledasimilarchallengeatthedistrictcourt,whichcouldeventually
gototheSupremeCourt.
On 31 January 2012, the US CFTC and SEC released their joint report to the public on the regulatory
frameworkintheUSandabroad.ThereportprovidesanupdateontheregulatoryreformsintheUSand
abroad and suggests that since regulatory progress in meeting the 2009 G20 Leaders commitments
varies across jurisdictions, it is still too early to determine precisely where there is alignment
internationallyandwheretheremaybegapsorinconsistencies.
On 24 January 2012, EU ministers agreed on the final draft of the European markets infrastructure
regulation (EMIR). Specifically, the EU Council of Finance Ministers agreed on the treatment of third
countryCentralCounterpartyClearingHouses(CCPs)withinEMIR.TheMinistersagreedthatCCPsfrom
thirdcountrieswillberecognisedintheEuropeanUnionifthelegalregimeoftheirhomecountryhasan
effective equivalent system for the authorisation of CCPs authorised under foreign legal regimes.
Furthermore, the Ministers also reached an agreement on a system that limits the power of the
EuropeanSecuritiesand MarketsAuthority(ESMA)intheauthorizationprocessofCCPs.However,the
European Parliament raised concerns over the limited role of the ESMA. Once the final text has been
agreedbytheEuropeanParliamentinFebruary2012,itwillbevotedonintheEuropeanParliamentand
bytheEuropeanCouncil.
Grounds for Divorce?

Inanarrow32voteon11January2012,CFTCCommissionersproposedtheirownversionoftheVolcker
Rule, which prohibits proprietary trading activities of banks and limits their investments in privateequity
andhedgefundsinlinewiththerestrictionsalreadyproposedbytheFederalDepositInsuranceCorp.,the
FederalReserve,theSECandtheComptrolleroftheCurrencyinOctober,2011.TheintentoftheVolcker
Rule is to reduce risk in the US banking system by limiting the excessive risktaking activities of banking
entities,definedasanyinsureddepositoryinstitutionsandtheirsubsidiaries.
TheDoddFrankActmandatestheruletobeimplementedby21July2012.Bankingentitiesmustcomply
withthenewrequirementby21July2014fortheirpreexistinginvestments.However,theFederalReserve
Boardcanextendthedeadlineforcomplianceforuptothreeyears.
Volcker Rule
Therulehasbasicallytwoparts.Thefirstpartisrelatedtorestrictionsonactivitiesofbankinginstitutions,
exceptfornonUSbankingentitiestransactionsoutsideoftheUnitedStateswithnonUSresidents.Therule
prohibits proprietary trading, while allowing transactions related to underwriting, marketmaking, risk
mitigatinghedging,tradingincertainUSgovernmentobligations,andtradingonbehalfofcustomers.The
statute defines proprietary trading as engaging in the purchase or sale of certain financial assets as a
principalforthetradingaccountofacoveredbankingentity.
Financialassetsincludesecurities,derivatives,commodityfuturesandoptionsontheseinstruments,butdo
not include positions in loans, spot foreign exchange or spot commodities. The rule also explains what
constitutesanentitystradingaccount.Thedefinitionoftradingaccountspecificallyincludespositionstaken
principally for the purpose of shortterm (less than 60 days) resale. The proposed rule calls for the
establishmentofinternalcomplianceprogrammesandreportingrequirementsonbankingentities.Therule
furtherprovidesguidanceonwhatbankingentitiesmustdotoprovethattheyarenotproprietarytrading
butengaginginpermittedactivities,suchasmarketmakingortradingonbehalfofcustomers.Finally,the
proposed rule provides detailed limitations on the permitted activities. For instance, if their permitted
activitywouldendangerthesafetyorsoundnessofthebankingentityorthefinancialstabilityoftheUnited
States,thenitisconsideredproprietarytradinganditisprohibited.
10 F EBRUARY 2012
37
P RICES
Grounds for Divorce? (continued)

Thesecondpartoftheproposedruleisrelatedtobankingentitiesrelationshipwithprivateequityfunds
andhedgefunds.Inordertopreventabankfromindirectlyengaginginproprietarytradingthroughdirect
investmentandalsotopreventabankfrompossiblybailingoutsuchfunds,therulelimitsbankingentities
investmentinsuchfunds.
Concerns over the Volcker Rule

Marketparticipants,includingregulatorsthemselves,arguedthattheproposedregulationisoverlycomplex.
EvenVolckerhimselfsaidduringaspeechinNovemberthattheproposedrulewasmuchmorecomplicated
than initially intended. Regulators have already admitted the difficulty in implementing the rule. The
determinationofwhatconstitutesproprietarytradingandwhatconstituteslegitimatetradingactivitywillbe
challenging.Althoughmostbankingentitiesalreadyclosedtheirproprietarytradingdesks,somearguethat
they are merely moving these activities to their marketmaking activities. Some market participants urge
regulators to put more clarity on the scope of proprietary trading and on the exceptions for permissible
activities. However, regulators argued that compliance with the rules will not be based on tradebytrade
enforcementbutratheratpoliciesandprocedurallevels.Ontheotherhand,iftherulemistakenlyidentifies
banksmarketmakingtradesasproprietarytrades,thiswillhaveanimpactonliquidityandtherebyonthe
overalleconomy.
ForeigngovernmentsalsoraisedconcernsovertheprohibitionofUSbankstradinginforeigngovernments
bonds.SincetheUSbanksareoneofthebiggestbondbuyers,prohibitionsimplymorecostlyborrowingfor
foreigngovernments.Theproposedrule,ratherthanreducingrisk,mostlikelywilldrivethatriskintoother
places.TheJapanese,CanadianandBritishgovernmentshavesaidtheproposalaggravatestheriskfortheir
markets.SomefurtherarguethatiftheVolckerruledoesresultinincreasedborrowingcostsforEuropean
governments,whicharealreadyfacedwithhigherborrowingcosts,thentheeconomicfalloutmaynotbe
containedtotheContinent.
Impact on Energy Markets

Initscurrentproposedform,theVolckerRuledoesnotprohibitbankinginstitutionsfromholdingpositions
in spot commodities, in which case several reports suggest that some banks may become very active
physical market players. However, the rule prohibits proprietary trading by banking entities and their
subsidiariesinenergyderivativesmarkets.Bankinginstitutionshavebeenactiveplayers,especiallysincethe
mid2000s in energy derivatives markets, including in overthe counter (OTC) markets. In fact, most swap
dealers in energy derivatives markets are either banking institutions or their affiliates; the latest
CommitmentsofTraderspositiondatasuggeststhat27.18%and35.46%oftheopeninterestonthelong
sideandshortside,respectively,oftheWTIfuturescontractsareheldbyswapdealers.However,thereisno
estimate of how much of the swap dealers position could be considered as proprietary trading. It will
depend on how narrowly regulators interpret the scope of the definition of marketmaking versus
proprietarytrading.Theinterpretationismuchmoreimportantinthecaseoftheirtradingactivityinswaps
markets,wheretheyaregenerallycounterpartiestocommodityindextraders,hedgersandspeculators.If
theirtradeswithotherpartiesareconsideredasproprietarytrading,thenthebanwouldcoveralmostevery
tradebyswapdealersinthefuturesandswapsmarkets.However,weexpectmosttradestobeconsidered
asmarketmakingortradingonbehalfofcustomers,andthereforeweanticipatelimitedimpactonliquidity
inenergymarkets.
Spot Crude Oil Prices

SpotcrudeoilmarketsstrengthenedinJanuaryinlinewithrisingtensionsbetweenIranandtheWest
followingnew,morestringentsanctionsadoptedbytheEUandUS.Inresponse,Tehranthreatenedto
cutoffexportstosomeEuropeancountriesitdeemsespeciallyhostile.Spotpricesforbenchmarkcrudes
roseinJanuaryby$1.75$2.75/bbl,withaveragepricesforDatedBrentaround$110.60/bblandWTIat
$100.35/bbl.
38
10 F EBRUARY 2012
P RICES
Our usual summary tables of average spot crude oil and products prices, and
Table 13, in the subscriber edition of this report have been removed pending
further licensing discussions with the data provider.
Spot crude prices moves in early February, however, were mixed. Dated Brent continued its upward
climbtosixmonthhighsasacoldblastofSiberianweathersweptacrossEuropeandpushedspotprices
about$6/bblaboveJanuarylevels.Bycontrast,spotpricesforWTIwereoffabout$1/bbloverthesame
periodasrisingstocklevelsatCushing,Oklahomaaddeddownwardpressure.
ByearlyFebruarythepricespreadbetweenthetwobenchmarkcrudeshadwidenedtolevelsnotseen
sincelastSeptember,whentheyaveragedover$27.50/bbl.By6February,theWTI/Brentdifferentialhit
anintradaytradinghighofover$20/bblcomparedwithanaverage$10.20/bblinJanuaryand$9.25/bbl
inDecember.
$/bbl
130
Benchmark Crude Prices
$/bbl
WTI vs Dated Brent Differential
120
-5
110
-10
100
-15
90
-20
-25
80
Data source: Platts analysis
70
Jan 11
Apr 11
WTI Cushing
-30
Jul 11
Oct 11
Dated Brent
Dubai
-35
Jan 11
Jan 12
Apr 11
Jul 11
Oct 11
Jan 12
UScrudeoilstocksheldinstorageatCushingmovedabovethefiveyearaverageinearlyFebruary,toa
lofty 30.4 mb, after declining for five weeks due to a combination of sharply higher crude flows from
Canada, a surge in Bakken output from North Dakota and reduced refinery throughput rates in the
Midcontinentregionduetomaintenancework.
An increase in Cushing storage capacity last year, with more planned for 2012, should theoretically
provide more room to hold growing supplies in the region, taking the pressure off prompt prices (see
OMR 18 January 2012, Stocks, Cushing Storage Expansion). But in practice, the relatively steady
increase in crude flows into Cushing, especially from the Bakken producing region that posted an
increaseofaround250kb/dlastyear,continuestoexacerbatemarketdynamics(seeOMR10November
2011,Supply,EagleFordandBakkenBonanzatoTransformUSOilProductionOutlook).
Ultimately, the addition of new pipeline capacity flowing out of Cushing to the US Gulf Coast refining
centrewillprovidetheonlypermanentreliefvalvefortheregion.TheplannedreversaloftheSeaway
pipeline, which will have a capacity of 150 kb/d, has been delayed several months and is now not
expectedtobeoperationaluntilendJune.Thefateofthecontroversial700kb/dKeystoneXLpipeline,
whichwillrunfromAlberta,CanadatotheUSGulfCoastisstillcaughtinaquagmire(seeSupply,Short
TermImpactsofKeystoneXLdecision).
PlannedandunplannedmaintenanceworkbyrefinersintheUSMidcontinenthasalsosharplycurtailed
demandforcrudeintheshortterm,especiallyfromCanadianproducers.Combinedwithtightpipeline
capacity, price discounts for Canadian crude versus WTI have also cratered. Western Canada Select
(WCS)heavycrudewastradingatadiscountof$31.50/bbltoWTIinearlyFebruarycomparedtoaround
$17.50/bblamonthago.
10 F EBRUARY 2012
39
P RICES
A blast of exceptionally cold weather across Europe triggered a jump in Dated Brent prices in early
February. That said, prices are relatively cheap compared with Dubai and other Middle East grades,
promptingarecordlevelofexportstoAsiainrecentweeks.MiddleEastDubaiandOmangradeswere
briefly trading at a premium to dated Brent in January. However, the average Brent/Dubai differential
narrowed to around $0.80/bbl in January compared with $1.40/bbl in December and a more normal
$5/bblseenonaveragein2011.
$/bbl
5
Middle Eastern Crude Prices

vs. Dated Brent
$/bbl
1
Urals
Differentials (NWE / Med) vs Brent
0
-1
-2
-5
-3
-4
-10
-15
Jan 11
-5
Data source: Platts anlaysis
Apr 11
Jul 11
Oman-DB
-6
Jan 11
Oct 11
Jan 12
Dubai-DB
Apr 11
Jul 11
Urals (NWE)
Oct 11
Jan 12
Urals (Med)
TherelativelyweakerBrentpricereflectsgrowingavailabilitiesoflight,sweetcrudeinEurope,especially
fromtheNorthSeaaswellasLibya,andreducedrefinerdemandinEurope.Inturn,strongerdemandfor
distillates, higher fuel oil crack spreads and reduced Russian exports boosted Urals to a premium to
Dated Brent for a few days at endJanuary. The Urals/Brent price spread was running at around
$0.30/bbl in early February compared with around an average $0.70/bbl in January. Urals is seen by
manyasafairlyclosesubstituteintheeventofcurtailedIraniansuppliesintoEurope.
Competitively priced West African crudes from Nigeria and Angola are also moving at a steady clip to
Asia, with arguably arbitrage economics playing more of a role in this trade than moves to replace
Iranian crude, given the quality differentials between African and Iranian grades. China is reportedly
takinginextraSaudiandRussianESPOcrude.Exceptionallystrongfueloilcrackspreadsaresupporting
strongerpricesforheavierMiddleEastgrades.
$/bbl
Middle Eastern Crude Prices
125
120
115
110
105
100
95
90
Jan 11
Apr 11
Murban
Jul 11
Oct 11
Dubai
Jan 12
Oman
$/bbl
ESPO differentials
8
6
4
2
0
-2
-4
-6
Jan 11
Apr 11
Jul 11
Oct 11
Jan 12
ESPO vs Dated Brent
ESPO vs Dubai
ESPO vs Oman
40
10 F EBRUARY 2012
P RICES
Spot Product Prices

ProductcrackspreadsincreasedacrosstheboardinJanuary,withdifferentialsforgasolineandnaphtha
at the top of the barrel and fuel oils at the bottom of the barrel posting the largest gains. Middle
distillate markets are still strong, but moved within a smaller range over the month, except in the US
wherecracksimproved.
Gasoline prices posted healthy gains in all regions in January, with differentials increasing $56/bbl
monthonmonth.Thesurgewaslargelyduetotightersupplies,stemmingfromrefineryclosuresinboth
EuropeandPADDI,andtheannouncementoftheclosureofHovensas350kb/dSt.Croixrefineryinthe
CaribbeanfrommidFebruary,animportantsupplierofgasolinetotheUSEastCoast.
In the US, New York Harbour unleaded gasoline versus WTI increased by $6.11/bbl monthonmonth,
while the differential to Mars crude at the US Gulf increased $6.23/bbl. In addition to the announced
refinery shutdowns, a number of smaller unplanned outages on the US East Coast towards the end of
January also pushed crack spreads higher, even though the actual effect on supplies was limited.
Although weekly US demand readings are still depressed, export demand, particularly from Latin
America, has remained strong. US gasoline exports increased to recordhigh levels throughout 2011,
basedonlatestavailabledatafromNovember2011.
InEurope,crackspreadsgainedasimilar$56/bblonaverageinJanuary.DuetothehighUSprices,the
arbitrage to the US East Coast was open, but also exports to the Middle East and North Africa were
supportive for the European market. After trade unions in Nigeria went on strike in midJanuary to
protest against the removal of fuel subsidies, part of the fuel subsidy was restored, also calming
Europeangasolinemarkets.
$/bbl
Gasoline
Cracks to Benchmark Crudes
60
50
40
10
6
Naphtha
2
-2
30
20
10
0
-10
Jan 11
$/bbl
-6
-10
-14
Apr 11
Jul 11
NWE Unl 10ppm
Med Unl 10ppm
Oct 11
Jan 12
NYH Unl 93
SP Prem Unl
-18
Jan 11
Apr 11
NWE
Med CIF
Jul 11
Oct 11
SP
ME Gulf
Jan 12
Asian gasoline crack spreads followed the increases in the Atlantic basin, with crack spreads gaining
$6.75/bbl to Dubai monthonmonth. The most important factor driving prices apart from continuously
strong regional demand was expectations of tightening supply with the upcoming refinery maintenance
season.
NaphthacrackscontinuedtoimproveinJanuary,butwerestilltradingata$5/bbldiscounttocrudein
bothEuropeandSingaporeforthemonthonaverage.Boththerecentreboundingasolinemarketsand
strongerdemandfrom petrochemicalproducersinSouthKoreaandTaiwan weresupportive,partlyas
recentlystrongerLPGpricesagainmadenaphthathepreferredfeedstockforpetrochemicalproducers.
Meanwhile, supplies are to be restricted by partial closure of Algerias Skikda and Indias Jamnagar
refineriesduetomaintenanceinthecomingmonths.
10 F EBRUARY 2012
41
P RICES
Middle distillate crack spreads in Europe stabilised at an elevated level in January, with gasoil crack
spreads moving within a $1518/bbl range. This was in spite of mild weather most of the month and
independent stocks in the ARA region building in January and standing above the fiveyear average at
endmonth.MovingintoFebruary,renewedsupportcouldcomefromthecolderweather.
$/bbl
$/bbl
Gasoil/Heating Oil
45
40
35
30
25
20
15
10
5
Jan 11
Apr 11
Jul 11
NWE Gasoil 0.1%
Med Gasoil 0.1%
Oct 11
50
45
40
35
30
25
20
15
10
Apr 11
Jul 11
Jan 11
Jan 12
NYH No. 2
SP Gasoil 0.5%
Diesel Fuel
NWE ULSD 10ppm

Med ULSD 10ppm
Jan 12
NYH No. 2
NYH ULSD
Middle distillate markets in the US strengthened in January and early February, and No. 2 oil gained
$5.24/bblversusWTImonthonmonthinNewYorkHarbour,and$3.36/bblversusMarsintheUSGulf.
ThiswaspartlyduetostockdrawsinthesecondhalfofJanuary,butalsotheannouncedclosureofthe
St.CroixrefinerysupportedcrackspreadsonexpectationsofhighermiddledistillateexportsfromtheUS
toLatinAmerica.
InSingapore,gasoilcracksimprovedby$1.45/bbltoDubaiasfurtherstockdrawsfromalreadylowlevels
continued to support prices, together with prospects of even tighter supply ahead with the upcoming
refinerymaintenanceseason.
$/bbl
Oct 11
$/bbl
Low-Sulphur Fuel Oil (1%)

20
15
10
5
0
-5
-10
-15
-20
Jan 11
Apr 11
Jul 11
NWE LSFO 1%
SP LSWR
Oct 11
High-Sulphur Fuel Oil

10
5
0
-5
-10
-15
-20
-25
Jan 11
Apr 11
Jul 11
Jan 12
Med LSFO 1%
NWE HSFO 3.5%

SP HSFO 380 4%
Jan 12
Med HSFO 3.5%
Fueloilmarketscontinuedtoshowunusualstrength,andinAsiaHSFOcrackswereatrecordhighswith
positive differentials to Dubai for January on average. Continued tightness in the bunker fuel market,
with refiners still adjusting to the new global sulphur regulations, explains much of the strength. In
addition,therefineryclosuresinEuropehavetightenedsuppliesofstraightrunfueloils,togetherwith
the loss of Sudanese Dar Blend exports, which has hit the Chinese market in particular (see Supply,
SudanandSouthSudan:OveraBarrel).MovingintoFebruary,Asiancrackspreadsnarrowedsomewhat
onthebackofalargestockbuildinSingaporeasarbitragevolumesarrived,andreportsoflessChinese
buyingofstraightrunfueloil.TheAsianLSWRcrackcontinuedtostrengthenonstrongutilitydemand,
especiallyfromJapanamidfallingtemperatures.
42
Oct 11
10 F EBRUARY 2012
P RICES
Freight
All benchmark crude tanker rates experienced a sharp downturn in late January and early February,
althoughtheystillheldabovetheir3Q11lows.TheVLCCMiddleEastGulfJapanrouteinitiallyralliedto
over $17/mt on brisk preChinese new year holiday trading but as the holiday began, market activity
easedagain,tonnagebuilt,notablyfromnewbuildsarrivinginthemarket,andratesplungedtobelow
$13/mtbyearlyFebruary.Anecdotalreportsofproblemssecuringinsuranceforvesselsonroutesintoor
outofIran,orwhichhaverecentlycalledatIranianports,haveyettotranslateintomajorvesselsupply
problems,althoughsomeanalystshavewarnedthiscouldbecomemoreofanissuegoingforward.
US$/m t
28
Daily Crude Tanker Rates
US$/m t
35
24
30
20
25
16
20
12
15
10
4
0
Jun 10
Data so urce: P latts analysis
Dec 10
8 0 k t N S e a - N W E ur
V LC C M E G ulf - J a p
Jun 11
Dec 11
13 0 k t W A f r- US A C
Daily Product Tanker Rates
5
0
Jun 10
Data so urce: P latts analysis
Dec 10
3 0 K C a rib - US A C
75K M EG-Jap
Jun 11
Dec 11
2 5 K UKC - US A C
3 0 K S E A s ia - J a p
In the Suezmax market, rates on the benchmark West Africa US Atlantic Coast trade experienced a
similarpatternofboomandbust,afterbreaching$20/mtinmidJanuaryforthefirsttimesinceMarch
2011, rates nosedived back to $15/mt by early February as demand waned. In Northern Europe,
unseasonablymildweatherlimitedgainsontheAframaxNorthSeaNorthwestEuropevoyage.Indeed,
inmidwinterrateswouldnormallybegettingaboostfromicerelateddelaysatRussianports,however,
forthefirsttimeinfiveyears,PrimorskhadnoiceclassrestrictionsinplaceduringJanuaryalthoughthis
islikelytochangeinmidFebruary.
Producttankerratesexperiencedasimilartrendtothosefordirtyvesselswithanygainsmadeduring
early January being erased by early February. The exception to this was the notoriously volatile
transatlantic UK US Atlantic voyage coast which, after descending in late February on the back of
lengthening tonnage lists, managed to claw back some lost ground following the opening of a wide
gasolinearbitrageinearlyFebruary.IntheEast,2012hassofarbeencharacterisedbyaslowandsteady
erosionofrates,asdemandhasremainedgenerallystablebutservicedbyanampletonnagepool.
Onasteadydownwardtrendsincethestartof2012,theCaribbeanUSAtlanticCoastproducttradeis
likely to remain depressed for the foreseeable future following the midFebruary closure of Hovensas
St.CroixrefineryintheUSVirginIslands.Withtherefinerybeingamajorsupplierofproducts,notably
gasolineblendingcomponents,totheUSEastCoast,itisanticipatedthatitsclosureislikelytotranslate
into lower demand for product tankers in the region given that US imports from other Caribbean
refineriesarecomparativelysmalltothosepreviouslysourcedfromSt.Croix.However,thisclosurecould
buttress the UK US Atlantic Coast market since it is likely that US product imports will need to be
sourcedfromelsewhere.
10 F EBRUARY 2012
43
R EFINING
REFINING
Summary
Global refinery crude throughput estimates for 1Q12 are largely unchanged from last months
report,asminorupwardsadjustmenttoOECDrunsareoffsetbyaloweroutlookforthenonOECD.In
particular, Latin American runs have been significantly reduced following the announced closure of
Hovensas350kb/dSt.CroixrefineryandlowerrunratesatValerosArubaplant.At74.9mb/d,global
runsareforecast220kb/daboveyearagolevelsandunchangedfromthepreviousquarter.
OECDcruderunsroseby200kb/dinDecember,to36.7mb/d,and240kb/dhigherthansuggested
bypreliminarydata.StrongerrunsinEuropeandthePacificwerepartlyoffsetbylowerrunsinNorth
America,thelatterfallingbelowyearearlierlevelsforthefirsttimesinceJuly.Asaresult,totalOECD
runsfell0.9mb/dshortofend2010levels,duetounseasonablyweakdemandandpoormargins.
RefinerymarginsrosesignificantlyinallregionssurveyedinJanuary,assurpluscapacitycontinued
to be shed in mature markets. Concerns over Atlantic Basin product availability rose with the
announced shutdown of Hovensas 350 kb/d refinery in the US Virgin Islands and as European
independentrefinerPetroplusfiledforinsolvency.Marginssurgedbybetween$2.50$7.70/bbl,but
remainednegativeforseveralsimpleconfigurationssurveyed.
mb/d
77
Global Refining
mb/d
Crude Throughput
Annual growth
3.5
76
2.5
75
1.5
74
0.5
73
-0.5
72
-1.5
71
Jan
Global Throughputs vs. Demand
-2.5
Mar
May
Range 06-10
2010
2012 est.
Jul
-3.5
Sep
Nov
Jan
Average 06-10
2011 est.
1Q08
1Q09
Crude Runs
1Q10
1Q11
1Q12
Oil Product Demand
Global Refinery Overview

Globalrefinerycruderunsestimatesforboth4Q11and1Q12arelargelyunchangedsincelastmonths
report, at 74.9 mb/d. While changes to 4Q11 were minimal, offsetting adjustments for the OECD and
nonOECDfor1Q12mostlycancelledeachotherout.OuroutlookforLatinAmericancrudethroughputs
hasbeensignificantlycurtailedsincelastmonthsreportfollowingtheannouncedclosureofHovensas
St.Croix refinery in the US Virgin Islands and economic run cuts at Valeros Aruba plant. In contrast, a
slightlyhigher4Q11baselinefortheOECDhasbeencarriedforwardintotheearlypartof2012.Global
annual growth in throughputs is estimated at around 0.2 mb/d for both quarters, with the OECD
contractingandthenonOECDreportingmodestgrowth,mirroringoildemandtrends.
The significant slowdown seen in global oil product demand growth since 1Q11 is expected to extend
into2012,thoughnonOECDgrowthwillagainprovidesupportforglobaldemandfrom2Q12onwards.
While the shift in economic activity and oil demand to the nonOECD will naturally extend to refinery
operations, OECD runs could in part be supported by product exports. Total OECD refined product
exportshavebeenonasteadilyrisingtrendandaveraged5.5mb/dover2011(JanuaryNovember),of
whichroughly75%wenttononOECDcountries.TheUSGulfCoastandEuropecouldbecomeasource
forhigherproductimportsrequirementsfromLatinAmericaandtheUSEastCoastfollowingthemost
recentrefineryshutdownsinthelattertworegions.
44
10F EBRUARY 2012
R EFINING
Despitelacklustredemandoverall,marginsrosesignificantlyinallregionssurveyedinJanuary,providing
temporary respite to operators. Surplus refinery capacity continues to be shed in mature markets.
Concerns over Atlantic Basin product availability rose with the announced shutdown of Hovensas
350kb/d refinery in the US Virgin Islands and as European independent refiner Petroplus filed for
insolvencyinJanuary.ThefutureofPetroplusfiveplantsremainuncertain,thoughsomeinterestfrom
potential buyers has been noted. A sudden cold snap in the FSU, Europe and Japan provided further
support. Margins rose by between $2.50$7.70/bbl, but remained negative for several simple
configurations surveyed. It remains to be seen if the improved economics entice refiners to hike runs,
whichwouldagainputdownwardpressureonmarginsandinturnoperations.
mb/d
OECD Refined Product Exports
mb/d
6.0
42.0
5.0
40.0
4.0
38.0
3.0
OECD vs. Non-OECD Crude Runs
36.0
2.0
34.0
1.0
32.0
0.0
Jan-00 Jan-02 Jan-04 Jan-06 Jan-08 Jan-10
OECD N America
OECD Pacific
OECD Europe
To non-OECD
30.0
1Q2004
1Q2006 1Q2008 1Q2010 1Q2012

OECD
Non-OECD
Regardless, planned maintenance will cut runs in coming months. OECD spring turnarounds normally
peakoverMarchandApril,withUSrefinerstraditionallycompletingworkfirst.Europeanmaintenanceis
expectedtopeakinAprilthisyear,followedbythePacificinMay.NonOECDrunsarealsoexpectedto
fall from January through March, as especially Russian and Other Asian runs are curtailed by
maintenance, and capacity is reduced in Latin America. The startup of new capacity in China, Russia,
IndiaandPakistanisexpectedtoliftnonOECDrunsin2Q12and3Q12.
Global Refinery Crude Throughput1

3Q2011 Oct 11
Nov 11
Dec 11 4Q2011 Jan 12
Feb 12
Mar 12
1Q2012
Apr 12
May 12
North America
18.3
17.3
17.8
17.6
17.6
17.5
17.2
17.2
17.3
17.6
18.0
Europe
12.4
11.9
12.1
12.2
12.1
12.2
11.9
11.8
11.9
11.7
12.0
Pacific
6.4
6.2
6.6
6.8
6.5
6.9
7.0
6.6
6.8
6.4
6.2
37.2
35.5
36.5
36.7
36.2
36.5
36.1
35.5
36.1
35.8
36.2
Total OECD
6.6
6.5
6.6
6.6
6.6
6.7
6.6
6.4
6.6
6.3
6.3
Non-OECD Europe
FSU
0.5
0.5
0.6
0.6
0.5
0.6
0.5
0.5
0.5
0.5
0.6
China
8.8
8.7
9.2
9.2
9.1
9.4
9.2
9.1
9.2
9.3
9.1
Other Asia
8.9
8.5
9.1
9.1
8.9
9.3
9.1
9.1
9.2
9.0
9.3
Latin America
5.4
5.2
5.4
5.3
5.3
5.4
5.3
4.9
5.2
4.9
4.9
Middle East
6.3
6.2
6.1
6.0
6.1
5.9
6.0
5.7
5.9
5.8
6.0
2.2
2.2
2.2
2.3
2.2
2.2
2.2
2.2
2.2
2.2
2.2
Total Non-OECD
Africa
38.5
37.8
39.1
39.2
38.7
39.4
38.9
38.2
38.8
38.2
38.4
Total
75.7
73.2
75.5
75.9
74.9
76.0
75.1
73.7
74.9
73.9
74.5
1 Preliminary and estimated runs based on capacity, know n outages, economic run cuts and global demand forecast
10F EBRUARY 2012
45
R EFINING
OECD Refinery Throughput

OECD crude runs rose by 210 kb/d in December to 36.7mb/d, or 240kb/d higher than suggested by
preliminary data. Runs nevertheless remained weak, compared to both the previous year and the
fiveyear average. In total, OECD throughputs were 0.9 mb/d lower than a year earlier, with deficits
recordedforallregions.Inpart,thecontractioncanbeexplainedbyexceptionallyweakdemand,dueto
bothstructuralandtemporaryfactors.OECDconsumptionofrefinedproductsfellbycloseto1mb/din
4Q11,and0.5mb/dfortheyearintotal.OECDdemandwilllikelycontinuetodeclinein1Q12,onamild
start to the winter and as several economies flirt with recession, potentially undermining the recent
recovery in margins. As surplus capacity is being rationalised, the margin environment has recently
improved,providinganincentivetoboostthroughputsintheshortterm.Therecentcoldsnaprecorded
in Europe and the Pacific could further support February product demand and refinery runs, but the
weakoveralleconomicpictureseemslikelytolimitgainsinmarginsandthereforethroughputs.
OECD Total
mb/d
41
40
39
38
37
36
35
34
Jan
mb/d
Crude Throughput
OECD Demand vs. Crude Runs

Annual Change
2.0
1.0
0.0
-1.0
-2.0
Mar
May
Jul
Sep
Range 06-10
2010
2011
Nov
Jan
Average 06-10
2011 est.
2012 est.
-3.0
1Q09 3Q09 1Q10 3Q10 1Q11 3Q11 1Q12
Crude Runs
Oil Product Demand
Refinery Crude Throughput and Utilisation in OECD Countries

Change from
US2
Canada
Mexico
Jul 11
Aug 11
Sep 11
Oct 11
Nov 11
Dec 11
Nov 11
Dec 10
15.62
15.59
15.27
14.54
14.96
14.82
-0.14
1.61
1.68
1.74
1.62
1.63
1.67
0.04
Utilisation rate1
Dec 11
Dec 10
-0.16
85.2%
85.5%
-0.14
91.2%
99.0%
1.16
1.24
1.10
1.15
1.18
1.16
-0.02
0.06
70.0%
71.4%
18.39
18.51
18.11
17.32
17.77
17.65
-0.12
-0.24
84.6%
85.6%
France
1.34
1.37
1.33
1.32
1.38
1.41
0.02
-0.03
84.3%
77.5%
Germany
2.02
2.02
1.91
2.03
1.96
1.95
-0.01
-0.05
91.4%
83.3%
Italy
1.55
1.66
1.57
1.55
1.52
1.55
0.03
-0.25
70.8%
78.9%
Netherlands
1.04
1.04
1.04
0.97
0.97
0.99
0.02
-0.02
76.8%
78.5%
Spain
1.01
1.07
1.09
1.00
1.10
1.09
-0.02
0.00
66.7%
76.9%
United Kingdom
1.50
1.51
1.47
1.39
1.45
1.45
0.00
0.06
80.4%
77.3%
OECD North Am erica
Other OECD Europe
3.93
3.94
3.76
3.64
3.75
3.81
0.06
-0.14
77.2%
80.5%
12.39
12.61
12.18
11.90
12.14
12.24
0.095
-0.42
78.2%
79.5%
Japan
3.17
3.37
3.14
2.98
3.20
3.44
0.24
-0.27
74.9%
79.2%
South Korea
2.52
2.43
2.50
2.63
2.64
2.62
-0.02
0.05
95.7%
94.0%
Other OECD Pacific
0.70
0.74
0.73
0.63
0.72
0.74
0.02
-0.01
78.8%
80.1%
6.38
6.54
6.37
6.24
6.56
6.80
0.24
-0.24
82.2%
84.1%
37.16
37.66
36.66
35.46
36.47
36.68
0.21
-0.90
81.9%
83.2%
OECD Europe
OECD Pacific
OECD Total
1 Expressed as a percentage, based o n crude thro ughput and current o perable refining capacity
2 US50
46
10F EBRUARY 2012
R EFINING
North American crude runs declined by some

US East Coast Refinery Closures (kb/d)
120 kb/d in December, to average 17.6 mb/d. Com pany
Plant
Capacity
Close
ThesteepestfallcamefromtheUS,whereboth
Sunoco
Eagle Point
145
Nov-09
the East Coast and Gulf Coast saw lower runs,
Yorktow n
65
Aug-10
though mostly offset by higher throughputs in Western
Trainer*
185
Sep-11
the Midwest and the West Coast. East Coast ConocoPhillips
Marcus Hook*
175
Dec-11
runs fell by 160 kb/d, following the shutdown Sunoco
Sunoco
Philadelphia*
330
Jul-12
of Sunocos 175 kb/d Marcus Hook refinery.
Thecompany,whichhadalreadyannouncedin Total Potential Closures
900
September last year that it would close its *To be shut permanent ly if no buyer is found
Philadelphia and Marcus Hook plants by
July2012ifnobuyerswerefound,saidon1DecemberitwasshuttingitsMarcusHookplantearlierthan
expected due to deteriorating market conditions. ConocoPhillips already halted operations at its
185kb/dTrainerrefineryinlateSeptember2011,andwillbefollowedbySunocosPhiladelphiaplantin
July2012ifnobuyerisfound.Incontrast,refinerycapacityontheGulfCoastwillincreasein2012,once
Motivas325kb/dPortArthurrefineryexpansioniscompleted.Theprojectwilllifttotalplantcapacityto
600kb/dandisscheduledtobecompletedin1Q12.
OECD North America
mb/d
m b/d
Crude Throughput
19.0
US Weekly Refinery Throughput
16.5
16.0
18.5
15.5
18.0
15.0
17.5
14.5
17.0
14.0
Source: EIA
16.5
Jan
Mar
May
Jul
Range 06-10
2010
2011
Sep
Nov
Average 06-10
2011 est.
2012 est.
13.5
Jan
Jan
Apr
Jul
Range 2007-2011
2011
Oct
5-yr Average
2012
WeeklydatafromtheEIAshowUScrudeintakedecliningsharplyinJanuary,inlinewithourprojection,
to14.6mb/donaverage.ThroughputsfellintheMidwest,asValeros85kb/dArdmorerefineryshutfor
plannedmaintenance,butremainedabovethehistoricalrangeduetocontinuedfavourableeconomics.
EastCoastrunsdroppedtoonly880kb/d,160kb/dbelowJanuary2011and410kb/dlowerthanthe
fiveyear average. Gulf Coast runs, meanwhile, fell 145 kb/d in January, despite significantly improved
margins.MaintenanceatCitgosandConocosLakeCharlesplantsandBPsTexasCityrefineryreduced
runsto7.2mb/d.WhileGulfCoastmaintenanceisexpectedtointensifyincomingweeks,somesupport
torunscouldcomefromimprovedmarginsandthestartupofMotivasexpandedplant.Inaddition,the
shutdown of Hovensas 350kb/d St. Croix plant, and lower runs at Valeros Aruba plant could lead to
extrademandforoilproductsfromGulfCoastrefiners.
m b/d
m b/d
US PADD 1 Refinery Throughputs
1.8
3.7
1.6
3.5
1.4
3.3
1.2
3.1
1.0
0.8
US PADD 2 Refinery Throughputs
2.9
Source: EIA
0.6
Jan
Source: EIA
Apr
Range 2007-2011
2011
10F EBRUARY 2012
Jul
2.7
Jan
Oct
5-yr Average
2012
Apr
Range 2007-2011
2011
Jul
Oct
5-yr Average
2012
47
R EFINING
MarginssawsignificantimprovementsonboththeGulfandWestCoastsinJanuary,partlysupportedby
theclosuresinEurope,theUSEastCoastandtheVirginIslands.USGulfCoastmarginsrosesharplyforall
crudes and configurations surveyed, but remained negative for Brent Cracking and Maya Coking. LLS
cracking margins saw the sharpest increase of $5.46/bbl on average, to reach $5.93/bbl in the week
ending3February.Surginggasolineprices,onsupplyconcerns,werebehindtheincreasedmarginsand
cracks.USWestCoastmarginssawsimilarincreases,withKernmarginspostingthelargestgains,asKern
strengthenedlessthanothercrudes.
The January announcement that Hovensa is converting its 350kb/d St. Croix plant into a terminal
augmentedconcernsoverproductavailability,especiallytothevulnerableEastCoastmarket,whichhas
beenalargeimporterofproductsfromtheCaribbeanplant.Inaddition,Valerorecentlyputthefutureof
its235kb/dArubarefinerybackintoquestion,asmanagementsuggestedthattheplantmightalsobe
turnedintoaterminal.ValerofurtherannouncedtheywerenolongerindiscussionwithMurphyOilto
takeoveritsUKMilfordHavenrefinery.MurphysCEOsaidinlateJanuarythattheplantcouldbeturned
intoaterminalifnobuyercomesforward.
$/bbl
15
$/bbl
20
15
10
5
0
-5
-10
-15
-20
Jun 11
USGC Refining Margins

Source: Purvin & Gertz Inc.
10
5
0
-5
-10
Jun 11
Aug 11
Oct 11
Dec 11
Maya (Coking)
Mars (Coking)
Feb 12
USWC Refining Margins

Source: Purvin & Gertz Inc.
Aug 11
Oct 11
Dec 11
Kern (Cracking)
LLS (Cracking)
Brent (Cracking)
Feb 12
ANS (Cracking)
Kern (Coking)
Oman (Cracking)
European runs for December averaged 12.2mb/d, higher by 170 kb/d than suggested by preliminary
Euroilstock data and 100 kb/d up versus November. The endyear figure is still some 400 kb/d below
December2010,withItalianrunsinparticularrunningbelowyearearlierlevels.Europeanfueldemand
contracted by 300 kb/d in 2011, with 4Q consumption particularly weak at 690kb/d yoy. Looking
ahead, runs are expected to decline further in 1Q12 as spring maintenance intensifies. Preliminary
EuroilstockdatashowJanuaryrunsforEU15+Norwaydownby50kb/d.Europeanturnaroundsnormally
peakoverMarchApril.Somesupportcouldcomefromrecentlyhighermarginsintheregion,however.
European refining margins surged by $3.30/bbl on average in January, though hydroskimming margins
remainedweakandmostlynegative.CrackingmarginsinitiallyimprovedinFebruary,supportedbythe
recentcoldsnap,butlaterfellbackonhighercrudeprices.
OECD Europe
mb/d
14.4
1.5
13.4
12.9
1.0
12.4
0.5
11.9
Mar
May
Range 06-10
2010
2011
48
Firm Shutdowns
2.0
13.9
11.4
Jan
OECD Europe
mb/d
Crude Throughput
Jul
Sep
Nov
0.0
Jan
Jan
Average 06-10
2011 est.
2012 est.
Mar
May
Jul
Sep
Nov
Jan
Range 07-11
2011
2012 Forecast
2012 Reported
10F EBRUARY 2012
R EFINING
ThefutureofPetroplusfiveEuropeanrefineriesremainsuncertain,aftertalkswithlendersfailedinlate
Januaryandthecompanywasforcedtofileforinsolvency.Petroplushadalreadyhaltedoperationsatits
Belgian, Swiss and French plants in January due to problems financing crude purchases. Operations at
theUKandGermanplants,currentlyrunbyadministrators,havecontinuedatreducedutilisationof45%
and 40% respectively. Swiss private equity group Goldsmith, already a shareholder in the group, has
announced it is interested in buying all five plants. Swiss investment group Gary Klesch has shown its
interest in buying the Coryton, Petit Couronne and Ingolstadt plants. While there is a risk that the
Corytonrefinerywouldalsohavetoshutforsometimebeforeasalecanbefinalised,asitstrugglesto
secure crude supplies, we assume it will continue to run at reduced capacity utilisation. National
authoritiesandadministratorsaremakingeffortstosecurebuyersandtorestarttherefineriesassoon
aspossible.
$/bbl
6
4
2
0
-2
-4
-6
-8
-10
-12
Jun 11
$/bbl
5
NWE Refining Margins
Mediterranean Margins
-5
Aug 11
Oct 11
Dec 11
Brent Cracking
Urals Cracking
-10
Jun 11
Feb 12
Brent H'skimming
Urals H'skimming
Aug 11
Oct 11
Urals Cracking
Es Sider Cracking
Dec 11
Feb 12
Urals H'skimming
Es Sider H'skimming
OECDPacificrunssurged240kb/dinDecember,to6.8mb/d,onstrongerJapaneseruns.Weeklydata
fromthePetroleumAssociationofJapan(PAJ)indicateJapaneserunsroseinJanuary,to3.5mb/d,the
highest since the devastating earthquake that hit the country in March 2011. The two refineries still
closedafterthedisasterareexpectedtorestartincomingmonths.JXNipponstartedtestrunsatits145
kb/dSendaiplantinJanuaryandisexpectedtorecommencecommercialoperationsinMarch.CosmoOil
isplanningtorestartitsChibarefinerygradually,assoonasitsecuresapprovalsfromlocalauthorities.
The plant already restarted some desulphurisation units in December. South Korean runs trended
sideways,closetorecordhighsof2.6mb/dinDecember,slightlyhigherthanpreviousexpectations.
OECD Pacific
mb/d
m b/d
5.0
Crude Throughput
7.5
Japan Weekly Refinery Throughput
4.5
7.0
4.0
6.5
3.5
6.0
3.0
5.5
2.5
Jan
Source: PAJ, IEA est imates
Jan
Mar
May
Range 06-10
2010
2011
Jul
Sep
Nov
Jan
Average 06-10
2011 (est.)
2012 est.
Apr
Jul
Range 2007-11
Oct
5-yr Average
2011
2012
Non-OECD Refinery Throughput

NonOECD refinery crude run estimates have been reduced by close to 200 kb/d for 1Q12 since last
months report, following the announced shutdown of Hovensas 350 kb/d refinery in the US Virgin
IslandsandeconomicruncutsatValerosArubaplant.SomesmallerdownwardsadjustmenttoMiddle
Eastern and African runs due to adjusted outages schedules also contributed. At 38.8 mb/d total non
OECDrunsneverthelessstood320kb/daboveyearearlierlevels.4Q11nonOECDthroughputestimates
areunchangedsincelastmonthsreport,at38.7mb/d.
10F EBRUARY 2012
49
R EFINING
mb/d
40
39
38
37
36
35
34
33
Jan
Non-OECD Total
mb/d
10.0
9.5
9.0
8.5
8.0
7.5
7.0
6.5
6.0
5.5
Jan
Crude Throughput
Mar
May
Jul
Sep
Range 06-10
2010
2012 est.
Nov
Jan
Average 06-10
2011 est.
China
Crude Throughput
Mar
May
Jul
Sep
2008
2010
2011 est.
Nov
Jan
2009
2011
2012 est.
WhilenonewdataisavailableforChinasincelastmonthsreport,Januarycrudethroughputestimates
havebeenraisedslightlytoarecordhighof9.3mb/donbetterrefineryprofitabilityleadinguptothe
NewYearholidays.CompanysurveysshowbothSinopecandPetroChinawereplanningtohikerunsin
January from already recordhigh endyear rates. The National Development and Reform Commission
(NDRC) is expected to raise retail ceiling prices of both gasoline and gasoil by CNY300/tonne from
8February. Increased runs also derived from newly commissioned units at Sinopec and PetroChinas
Yinchuan and Beihai plants, as these ramped up to full capacity in January. Overall, Chinese runs had
already attained record levels for a second consecutive month in December, when total throughputs
averaged9.28mb/d.
In Other Asia, refinery runs were largely in line with estimates for November and December, leaving
4Q11estimatesat8.9mb/d,unchangedfromayearearlier.Indianrunsareestimatedtohaveaveraged
4.3 mb/d in December, adjusting for Reliances Jamnagar export refinery and BPCLs recently
commissionedBinarefinerynotincludedinMinistrydata,3.3%higherthanayearearlierandessentially
flatfromthepreviousmonth.RefinerythroughputswerealsounchangedinSingaporeinDecember,at
1.2mb/d.SingaporerefinerymarginssawsignificantimprovementoverJanuaryandbouncedbackinto
positiveterritoryforcrackingconfigurations,withanevensharperreboundinhydroskimmingmargins.
Dubai hydroskimming margins averaged $1.09/bbl in January, the highest monthly average since
September2008.
Pakistans refinery run estimates have been adjusted slightly lower for NovemberJanuary as Byco Oil
Pakistanshutits35kb/drefineryoutsideKarachi,topreparefortheinstallationofa120kb/dcrudeunit.
Thecompletionoftheprojectisnowexpectedbytheendof2Q12,andwillmaketheplantPakistans
biggest. Taiwans crude runs fell to 720 kb/d in December, from 850 kb/d a month earlier, on safety
related shutdowns at Formosas Mailiao refinery, but were in line with our previous forecast. In
Thailand,runsreboundedby115kb/dinDecember,to910kb/dasmaintenancewounddown,alsoin
linewithpreviousexpectations.
$/bbl
5
Other Asia
mb/d
10.0
Crude Throughput
9.5
9.0
-5
Singapore Margins
8.5
-10
8.0
7.5
Jan
Mar
May
Range 06-10
2010
2012 est.
50
Jul
Sep
Nov
-15
Jun 11
Jan
Average 06-10
2011 est.
Aug 11
Oct 11
Dec 11
Feb 12
Dubai Hydrocracking
Dubai Hydroskimming
Tapis Hydrocracking
Tapis Hydroskimming
10F EBRUARY 2012
R EFINING
Russiancruderunsrosebycloseto150kb/dinJanuary,accordingtodatafromCDUTEK,to5.3mb/d,
matching 2011 peak summer levels. Official Ministry data for December were slightly lower than our
previous estimates due to lower runs at Tanecos recently commissioned Nizhnekamsk refinery. The
MinistrydataincludedthisrefineryforthefirsttimeinJanuary,withthelatestdatashowingtheplant
processed108kb/dinDecember.Inall,Decemberrunsweredown0.6%,to5.17mb/dasmaintenance
attheRyazanandSaratovplantswaspartlyoffsetbyhigherrunsattheAfipskyandMoscowrefineries.
In Kazakhstan, runs rose by some 60 kb/d, to 320 kb/d in December on rebounding runs at
PetroKazakhstans 105kb/d Shymkent refinery. The plant was shut down for a planned 30day
turnaround from 19 October. A fire at the same plant in early February was rapidly extinguished but
couldentaillowerrunsifanydamagewassustained.LithuaniasMazeikiairefineryisscheduledtoshut
for 30 days from midApril. While the refineries nameplate capacity is 300 kb/d, recent throughputs
averagealower190kb/d.
mb/d
7.0
6.8
6.6
6.4
6.2
6.0
5.8
5.6
5.4
Jan
FSU
mb/d
5.6
5.4
5.2
5.0
4.8
4.6
4.4
4.2
Jan
Crude Throughput
Mar
May
Jul
Sep
Range 06-10
2010
2012 est.
Nov
Jan
Russia
Crude Throughput
Mar
May
Jul
Sep
2008
2010
2011
Average 06-10
2011 est.
Nov
Jan
2009
2011 est.
2012 est.
The outlook for Latin American refinery runs has been reduced significantly since last months report,
followingtheannouncedclosureofHovensas350kb/dStCroixrefineryfrommidFebruaryanddueto
lower runs at Valeros Aruba refinery. Hovensa, a joint venture between Venezuelas PDV and Hess
Corporation of the US, announced on 18 January that it will permanently shut the 350 kb/d St. Croix
refinery in the US Virgin Islands, after recording cumulative losses of $1.3 billion over the last three
years. The plant, which will be converted to an oil product storage terminal, already cut capacity by
150kb/dlastJanuary.TherefineryprocessedmostlyVenezuelancrudesandsomeWestAfricangrades,
such as Gabonese Rabi light and Mandji. The implied loss of gasoline supplies, in particular, from the
already tight US East Coast market pushed gasoline prices and cracks sharply higher. NYMEX RBOB
futures cracks surged to almost $25/bbl in early February, up from only $10.70/bbl on average in
December. Hovensa processed 270kb/d in 4Q11. Valero, meanwhile, is looking into the viability and
future of its Aruba refinery and has cut runs amid poor margins and narrow discounts for heavy/sour
versuslight/sweetcrudes.Therefineryrunsheavy/sourcrudeandproducesfeedstocksprimarilysoldto
thecompanysUSGulfCoastplants.ThelowerrunscouldbenefitotheroperatorsontheUSGulfCoast.
Latin America
mb/d
5.8
mb/d
2.6
2.5
2.4
2.3
2.2
2.1
2.0
1.9
Jan
Crude Throughput
5.6
5.4
5.2
5.0
4.8
4.6
Jan
Mar
May
Range 06-10
2010
2012 est.
10F EBRUARY 2012
Jul
Sep
Nov
Jan
Average 06-10
2011 est.
Africa
Crude Throughput
Mar
May
Range 06-10
2010
2012 est.
Jul
Sep
Nov
Jan
Average 06-10
2011 est.
51
R EFINING
In Africa, Algerias Sonatrach will partly shut its 300 kb/d Skikda refinery from March to August as it
undertakesmaintenance,sharplyincreasinggasoilimportrequirementswhilereducingnaphthaexports.
Sources expect the plant to operate at 50% utilisation during the work. The countrys Arzew refinery,
which has been partially shut since November due to maintenance, was expected to resume normal
operationsbymidFebruary.
Chads sole refinery closed for a second time since its inauguration last July due to a pricing dispute
between the government and majority stakeholder CNPC. The refinery stopped producing fuel on
23December, but resumed operations on 6 February after the government and CNPC reached an
agreement.
Elsewhere,NigeriasNNPChadtotemporarilyshutitsKadunarefineryinDecemberfollowinganattackon
apipelineintheDeltastate.Libyaslargestrefinery,the220kb/dRasLanufplant,remainsshut,butcould
restart as early as February if full electricity supply to the Sarir and Messla fields is restored. In Sudan,
refineryoperationscouldbeimpactedbylowercrudeshipmentsfromSouthSudan.Feedstocksuppliesto
the100kb/drefineryinKhartoumareexpectedtobecut,asSouthSudanhaltedcrudeproduction,also
affectingSudansownproduction(seenonOPEC,SudanandSouthSudan:OveraBarrelAgain).
Selected Refining Margins in Major Refining Centres
($ /bbl)
Monthly Average
NW Europe
Brent (Cracking)
Urals (Cracking)
Dec 11
Jan 12
0.55
0.77
-0.21
0.35
3.01
3.95
Average for w eek ending:

06 Jan
13 Jan
20 Jan
27 Jan
03 Feb
3.22
3.60
1.53
4.02
2.23
3.21
3.37
3.99
4.31
4.47
3.92
3.82
Jan 12-Dec 11
Brent (Hydroskimming)
-1.13
-1.93
0.87
2.80
-0.51
0.55
1.26
1.81
1.32
Urals (Hydroskimming)
-3.67
-4.51
-0.87
3.64
-1.04
-0.94
-0.69
-0.63
-1.72
-0.61
-0.90
-3.90
-5.91
-1.22
-1.38
-4.10
-6.69
2.20
2.16
-1.31
-3.43
3.42
3.54
2.80
3.26
1.65
1.47
-1.24
-3.93
1.24
1.26
-2.01
-3.85
2.21
2.29
-1.42
-3.15
3.31
3.26
-0.70
-2.85
2.77
2.62
-1.23
-3.62
-6.00
-1.14
-3.52
-2.15
-6.77
-6.30
-1.65
-3.70
-2.02
-8.02
-1.86
3.81
0.35
1.50
-3.28
4.44
5.46
4.05
3.53
4.74
-3.93
0.59
-1.75
-0.39
-4.96
-3.31
3.08
-0.27
0.86
-3.27
-1.15
4.83
1.09
2.06
-3.31
0.15
5.45
1.58
2.62
-2.42
-0.38
5.93
1.93
2.96
-1.06
-5.46
-7.27
-3.56
-4.27
-1.32
1.00
-5.20
2.22
0.96
8.69
-0.83
7.36
2.28
7.69
4.37
5.15
2.23
8.48
-0.13
9.29
-1.51
6.78
-3.32
6.61
0.32
8.70
-1.59
6.27
2.16
10.48
0.69
7.38
2.63
10.19
1.51
8.57
Mediterranean Es Sider (Cracking)

Urals (Cracking)
Es Sider (Hydroskimming)
Urals (Hydroskimming)
US Gulf Coast
Change
Nov 11
Brent (Cracking)
LLS (Cracking)
Mars (Cracking)
Mars (Coking)
Maya (Coking)
US West Coast ANS (Cracking)

Kern (Cracking)
Oman (Cracking)
Kern (Coking)
Singapore
Dubai (Hydroskimming)
Tapis (Hydroskimming)
Dubai (Hydrocracking)
Tapis (Hydrocracking)
-1.60
-8.00
-0.84
-8.59
-2.06
-7.95
-0.63
-8.51
0.85
-4.27
2.11
-5.02
2.91
3.68
2.74
3.49
0.55
-7.03
1.85
-7.79
0.48
-5.33
1.77
-5.94
0.66
-3.56
1.84
-4.35
1.19
-2.22
2.34
-3.05
1.92
-2.22
3.49
-3.06
China
Cabinda (Hydroskimming)
Daqing (Hydroskimming)
Dubai (Hydroskimming)
Daqing (Hydrocracking)
Dubai (Hydrocracking)
-1.28
-1.78
-1.76
-2.23
-0.75
-0.05
-0.47
-2.35
-0.59
-0.79
2.70
0.95
0.47
1.14
1.85
2.75
1.42
2.82
1.73
2.64
0.92
-0.60
0.21
-0.64
1.61
2.04
-0.62
0.15
-0.45
1.54
3.41
1.67
0.25
1.81
1.55
3.48
2.37
0.75
2.77
2.03
4.15
2.98
1.61
3.35
3.35
Fo r the purpo ses o f this repo rt, refining margins are calculated fo r vario us co mplexity co nfiguratio ns, each o ptimised fo r pro cessing the specific crude in a specific refining centre
o n a 'full-co st' basis. Co nsequently, repo rted margins sho uld be taken as an indicatio n, o r pro xy, o f changes in pro fitability fo r a given refining centre. No attempt is made to mo del
o r o therwise co mment upo n the relative eco no mics o f specific refineries running individual crude slates and pro ducing custo m pro duct sales, no r are these calculatio ns intended
to infer the marginal values o f crudes fo r pricing purpo ses.
*The China refinery margin calculatio n represents a mo del based o n spo t pro duct impo rt/expo rt parity, and do es no t reflect internal pricing regulatio ns.
So urces: IEA , P urvin & Gertz Inc.
P lease no te that fro m this repo rt P urvin&Gertz has inco rpo rated its no rmal yearly updating o f Wo rldscale changes and vario us o perating co sts fo r the 2012 M argin M o del, affecting
also 2011margins.
52
10F EBRUARY 2012
TABLES
T ABLES
Table 1
WORLD OIL SUPPLY AND DEMAND
Table 1 - World Oil Supply and Demand

2008 2009
1Q10 2Q10 3Q10 4Q10 2010
1Q11 2Q11 3Q11 4Q11 2011
1Q12 2Q12 3Q12 4Q12 2012
OECD DEMAND
North America
Europe
Pacific
24.2 23.3
15.4 14.7
8.1
7.7
23.4 23.7 24.1 23.9 23.8

14.3 14.3 14.9 14.8 14.6
8.2
7.3 7.6
8.1
7.8
23.8 23.3 23.6 23.3 23.5

14.2 14.1 14.7 14.1 14.3
8.3 7.1 7.7
8.3 7.9
23.3 23.1 23.6 23.5 23.4

13.7 13.6 14.3 14.1 13.9
8.6 7.4
7.6 8.1
7.9
Total OECD
47.6 45.6
46.0 45.3 46.7 46.7 46.2
46.3 44.5 45.9 45.8 45.6
45.6 44.1 45.5 45.7 45.3
4.2
4.2
0.8
0.7
7.7
8.1
9.7 10.1
6.0
6.0
7.3
7.5
3.3
3.3
4.4
4.3 4.6
4.6
4.5
0.7
0.7 0.7
0.7
0.7
8.6
9.1 8.9
9.7
9.1
10.4 10.6 10.2 10.6 10.4
6.0
6.3 6.5
6.4
6.3
7.4
7.8 8.3
7.7
7.8
3.3
3.4 3.4
3.4
3.4
4.5 4.6 4.8

4.9 4.7
0.7 0.7 0.7
0.7 0.7
9.5 9.5 9.3
9.7 9.5
10.7 10.7 10.4 10.9 10.7
6.3 6.5 6.7
6.5 6.5
7.6 8.0 8.5
8.0 8.0
3.4 3.3 3.3
3.4 3.3
4.6 4.7
4.9 5.0
4.8
0.7 0.7
0.7 0.7
0.7
9.7 9.9
9.8 10.2
9.9
10.9 11.0 10.7 11.2 10.9
6.4 6.6
6.8 6.7
6.6
7.8 8.2
8.6 8.1
8.2
3.5 3.5
3.5 3.6
3.5
Total Non-OECD
38.9 39.9
40.8 42.2 42.5 43.1 42.2
42.7 43.3 43.6 44.1 43.4
43.5 44.6 45.0 45.5 44.6
86.6 85.6
86.8 87.5 89.1 89.8 88.3
89.0 87.9 89.5 89.8 89.1
89.1 88.7 90.5 91.2 89.9
Europe
Pacific
13.3 13.6
4.8
4.5
0.6
0.7
14.0 14.0 14.1 14.4 14.1

4.5
4.1 3.8
4.2
4.1
0.6
0.6 0.6
0.6
0.6
14.4 14.3 14.5 15.0 14.5

4.1 3.8 3.6
3.8 3.8
0.5 0.5 0.5
0.6 0.5
15.0 14.9 14.9 15.2 15.0

3.8 3.7
3.7 3.9
3.8
0.6 0.6
0.7 0.7
0.7
Total OECD
18.8 18.8
19.1 18.8 18.5 19.1 18.9
19.0 18.6 18.7 19.4 18.9
19.5 19.2 19.2 19.7 19.4
12.8 13.3
0.1
0.1
3.8
3.9
3.7
3.6
3.7
3.9
1.7
1.7
2.6
2.6
28.4 29.1
13.5 13.5 13.5 13.6 13.5

0.1
0.1 0.1
0.1
0.1
4.0
4.1 4.1
4.2
4.1
3.7
3.7 3.7
3.7
3.7
4.0
4.1 4.1
4.1
4.1
1.7
1.7 1.7
1.8
1.7
2.5
2.5 2.5
2.5
2.5
29.6 29.7 29.9 30.0 29.8
13.6 13.6 13.5 13.7 13.6

0.1 0.1 0.1
0.1 0.1
4.2 4.2 4.1
4.1 4.1
3.6 3.5 3.5
3.6 3.5
4.2 4.2 4.2
4.3 4.2
1.8 1.6 1.7
1.5 1.6
2.5 2.5 2.5
2.5 2.5
30.1 29.7 29.6 29.8 29.8
13.8 13.9 13.7 13.9 13.8

0.1 0.1
0.1 0.1
0.1
4.1 4.2
4.1 4.2
4.2
3.6 3.5
3.5 3.5
3.5
4.3 4.4
4.5 4.5
4.4
1.6 1.5
1.6 1.6
1.6
2.3 2.4
2.5 2.5
2.4
29.8 30.0 30.0 30.3 30.0
NON-OECD DEMAND
FSU
Europe
China
Other Asia
Latin America
Middle East
Africa
Total Demand
OECD SUPPLY
North America4
NON-OECD SUPPLY
FSU
Europe
China
Other Asia2
Latin America2,4
Middle East
Africa2
Total Non-OECD
Processing Gains3
2.0
2.0
2.0
2.1
2.1
2.1
2.1
2.2
2.1
2.1
2.2
2.2
2.3
2.2
2.2
2.3
2.3
Global Biofuels4
1.4
1.6
1.4
2.0
2.1
1.8
1.8
1.5
1.9
2.2
1.8
1.8
1.6
1.9
2.2
2.0
1.9
Total Non-OPEC2
50.6 51.5
52.1 52.5 52.6 53.1 52.6
52.7 52.3 52.6 53.2 52.7
53.2 53.4 53.7 54.3 53.6
Non-OPEC: Historical Composition2
49.6 51.5
52.1 52.5 52.6 53.1 52.6
52.7 52.3 52.6 53.2 52.7
53.2 53.4 53.7 54.3 53.6
Total OPEC2
31.6 29.1
4.5
4.9
36.1 34.1
29.3 29.3 29.7 29.6 29.5

5.2
5.2 5.4
5.6
5.3
34.5 34.5 35.1 35.2 34.8
30.0 29.5 29.9 30.5 30.0

5.7 5.7 5.8
5.9 5.8
35.7 35.2 35.7 36.4 35.8
OPEC: Historical Composition2
37.1 34.1
34.5 34.5 35.1 35.2 34.8
35.7 35.2 35.7 36.4 35.8
Total Supply6
86.7 85.6
86.6 87.0 87.7 88.3 87.4
88.5 87.5 88.3 89.6 88.5
0.4
0.0
0.9
-0.1
-0.1
-0.1
0.1
0.0
-0.4
0.0
OPEC
Crude5
NGLs
STOCK CHANGES AND MISCELLANEOUS

Reported OECD
Industry
0.3 -0.1
Government
0.0
0.1
Total
Floating Storage/Oil in Transit
Miscellaneous to balance7
Total Stock Ch. & Misc
-0.8
0.1
0.5
0.0
-0.1
-0.4
-0.6
0.1
6.1
6.2
6.5
6.5
6.3
-0.2
-0.1
0.3
0.0
0.4
0.9
-0.2
-0.7
0.1
-0.5
0.5
-0.5
-0.5
-0.2
0.0
-0.2
0.3
-0.3
-0.2
-0.4
0.1
-1.4
-0.2
-0.9
-0.3
-0.5
-0.2
-0.8
0.2
-0.3
-0.2
-0.7
-0.2
-0.5
-0.1
0.4
-0.1
-0.2
0.2
0.0
-0.2
-0.5
-1.4
-1.5
-0.9
-0.6
-0.4
-1.2
-0.2
-0.6
Memo items:
Call on OPEC crude + Stock ch.8
Adjusted Call on OPEC + Stock ch.9
31.5 29.2
31.3 28.8
29.5 29.8 31.1 31.2 30.4

29.1 28.4 30.1 30.7 29.6
30.6 29.9 31.2 30.7 30.6

30.3 29.2 30.7 31.1 30.3
29.8 29.2 30.4 30.3 29.9

29.3 28.6 29.9 29.8 29.4
1 Measured as deliveries from refineries and primary stocks, comprises inland deliveries, international marine bunkers, refinery fuel, crude for direct burning,
oil from non-conventional sources and other sources of supply.
2 Other Asia includes Indonesia throughout. Latin America excludes Ecuador throughout. Africa excludes Angola throughout.
Total Non-OPEC excludes all countries that were members of OPEC at 1 January 2009. Non-OPEC Historical Composition excludes countries that were OPEC members at that point in time.
Total OPEC comprises all countries which were OPEC members at 1 January 2009. OPEC Historical Composition comprises countries which were OPEC members at that point in time.
3 Net volumetric gains and losses in the refining process and marine transportation losses.
4 As of the July 2010 OMR, Global Biofuels comprise all world biofuel production including fuel ethanol from the US and Brazil.
5 As of the March 2006 OMR, Venezuelan Orinoco heavy crude production is included within Venezuelan crude estimates. Orimulsion fuel remains within the OPEC NGL and
non-conventional category, but Orimulsion production reportedly ceased from January 2007.
6 Comprises crude oil, condensates, NGLs, oil from non-conventional sources and other sources of supply.
7 Includes changes in non-reported stocks in OECD and non-OECD areas.
8 Equals the arithmetic difference between total demand minus total non-OPEC supply minus OPEC NGLs.
9 Equals the "Call on OPEC + Stock Ch." with "Miscellaneous to balance" added for historical periods and with an average of "Miscellaneous to balance" for the most recent 8 quarters added for forecast periods.
10 F EBRUARY 2012
53
T ABLES
Table 1A
Table 1a - WORLD
World Oil
ChangesFROM
fromLAST
LastMONTH'S
MonthsTABLE
Table11
OILSupply
SUPPLYand
AND Demand:
DEMAND: CHANGES
2008 2009
1Q10 2Q10 3Q10 4Q10 2010
1Q11 2Q11 3Q11 4Q11 2011
1Q12 2Q12 3Q12 4Q12 2012
OECD DEMAND
North America
Europe
Pacific
0.2
-0.1
-
0.1
-
-0.2
0.1
-0.2
-
0.1
-0.2
0.1
0.2
-0.2
0.1
0.1
-0.2
-
Total OECD
0.1
-0.1
-0.1
0.1
FSU
Europe
China
Other Asia
Latin America
Middle East
Africa
0.1
-
0.1
-
-0.1
0.1
-
-0.1
-
0.1
-0.1
-0.1
-
-0.1
-0.1
-
0.1
-0.1
-
Total Non-OECD
0.2
0.1
-0.2
-0.1
-0.2
-0.1
Total Demand
0.1
0.1
0.3
0.1
-0.3
-0.2
-0.2
0.1
-0.2
North America
Europe
Pacific
0.2
-0.2
-
0.1
-0.1
-
0.2
-0.2
-
0.3
-0.1
-
0.3
-0.1
-
0.3
-0.1
-
0.3
-0.1
-
Total OECD
0.1
0.2
0.2
0.1
Total Non-OECD
0.1
-0.2
-0.3
-0.2
-0.2
-0.1
-0.1
-0.1
-0.1
-0.2
Processing Gains
Global Biofuels
Total Non-OPEC
0.1
0.1
-0.3
-0.1
0.1
0.1
Non-OPEC: historical composition
0.1
0.1
-0.3
-0.1
0.1
0.1
Crude
NGLs
Total OPEC
OPEC: historical composition
Total Supply
0.1
STOCK CHANGES AND MISCELLANEOUS

REPORTED OECD
Industry
Government
-
-0.1
-0.1
-0.1
-0.2
-0.2
-0.3
-0.1
-0.2
NON-OECD DEMAND
OECD SUPPLY
NON-OECD SUPPLY
FSU
Europe
China
Other Asia
Latin America
Middle East
Africa
OPEC
Total
Floating Storage/Oil in Transit

Miscellaneous to balance
-0.1
-0.1
-0.1
-0.1
-0.1
Total Stock Ch. & Misc
-0.1
-0.1
-0.1
-0.1
-0.1
-0.3
-0.1
0.1
-
0.1
-
0.1
-
0.1
-
0.1
-
0.2
1.1
0.1
0.3
Memo items:
Call on OPEC crude + Stock ch.
Adjusted Call on OPEC + Stock ch.
When submitting their monthly oil statistics, OECD Member countries periodically update data for prior periods. Similar updates to non-OECD data can occur.
54
10 F EBRUARY 2012
T ABLES
Table 2
Table 2 - Summary of Global Oil Demand
SUMMARY OF GLOBAL OIL DEMAND
2009
1Q10
2Q10
3Q10
4Q10
2010
1Q11
2Q11
3Q11
4Q11
2011
1Q12
2Q12
3Q12
4Q12
2012
Demand (mb/d)
North America
Europe
Pacific
Total OECD
Asia
Middle East
Latin America
FSU
Africa
Europe
Total Non-OECD
World
23.29
14.66
7.69
45.64
18.19
7.53
5.99
4.18
3.33
0.71
39.93
85.57
23.41
14.32
8.23
45.95
18.98
7.42
6.05
4.38
3.33
0.67
40.84
86.79
23.69
14.26
7.34
45.29
19.65
7.83
6.29
4.33
3.43
0.68
42.21
87.50
24.10
14.93
7.62
46.65
19.12
8.29
6.46
4.56
3.38
0.68
42.49
89.14
23.85
14.83
8.07
46.75
20.26
7.72
6.39
4.58
3.43
0.70
43.08
89.83
23.76
14.58
7.82
46.16
19.50
7.82
6.30
4.46
3.39
0.68
42.16
88.32
23.78
14.18
8.35
46.31
20.27
7.62
6.28
4.45
3.41
0.67
42.70
89.01
23.31
14.11
7.11
44.54
20.23
8.00
6.47
4.62
3.34
0.69
43.34
87.88
23.56
14.69
7.68
45.93
19.70
8.45
6.65
4.83
3.27
0.72
43.61
89.55
23.32
14.14
8.31
45.77
20.61
7.96
6.52
4.86
3.39
0.72
44.05
89.82
23.49
14.28
7.86
45.64
20.20
8.01
6.48
4.69
3.35
0.70
43.43
89.07
23.35
13.70
8.58
45.63
20.57
7.76
6.42
4.58
3.48
0.68
43.49
89.12
23.12
13.63
7.38
44.13
20.87
8.20
6.63
4.68
3.53
0.70
44.61
88.73
23.61
14.33
7.61
45.55
20.45
8.63
6.80
4.89
3.49
0.71
44.98
90.52
23.46
14.10
8.13
45.69
21.42
8.12
6.71
4.97
3.56
0.72
45.49
91.18
23.38
13.94
7.92
45.25
20.83
8.18
6.64
4.78
3.52
0.70
44.64
89.89
of which: US50
Europe 5*
China
Japan
India
Russia
Brazil
Saudi Arabia
Canada
Korea
Mexico
Iran
Total
18.77
8.98
8.06
4.39
3.26
3.03
2.54
2.47
2.16
2.19
2.07
2.11
60.03
18.87
8.87
8.63
4.82
3.38
3.16
2.60
2.33
2.15
2.31
2.07
2.10
61.30
19.15
8.75
9.06
4.07
3.45
3.17
2.71
2.73
2.17
2.18
2.10
2.08
61.61
19.47
9.15
8.92
4.36
3.13
3.41
2.82
3.02
2.29
2.16
2.05
2.08
62.87
19.23
9.01
9.66
4.57
3.38
3.36
2.80
2.54
2.25
2.35
2.07
2.09
63.31
19.18
8.95
9.07
4.45
3.34
3.28
2.73
2.66
2.21
2.25
2.07
2.09
62.28
19.17
8.70
9.54
4.86
3.50
3.20
2.69
2.49
2.25
2.36
2.05
2.09
62.88
18.82
8.57
9.52
3.92
3.57
3.43
2.76
2.89
2.15
2.04
2.06
2.05
61.80
18.89
8.89
9.30
4.32
3.26
3.64
2.87
3.15
2.29
2.21
2.09
2.03
62.95
18.68
8.58
9.70
4.85
3.58
3.65
2.82
2.74
2.23
2.30
2.11
2.04
63.26
18.89
8.69
9.51
4.49
3.48
3.48
2.79
2.82
2.23
2.23
2.08
2.05
62.72
18.75
8.46
9.66
5.11
3.62
3.31
2.71
2.60
2.22
2.33
2.07
2.07
62.89
18.65
8.27
9.89
4.15
3.67
3.47
2.79
2.99
2.13
2.08
2.06
2.06
62.20
18.97
8.64
9.78
4.23
3.37
3.69
2.90
3.23
2.27
2.22
2.08
2.05
63.45
18.81
8.49
10.21
4.62
3.71
3.72
2.89
2.82
2.23
2.34
2.11
2.06
64.01
18.80
8.46
9.89
4.53
3.59
3.55
2.82
2.91
2.21
2.24
2.08
2.06
63.14
% of World
70.2%
70.6%
70.4%
70.5%
70.5%
70.5%
70.6%
70.3%
70.3%
70.4%
70.4%
70.6%
70.1%
70.1%
70.2%
70.2%
1.6
-1.0
1.5
0.8
6.8
2.7
3.8
1.6
2.2
-0.2
4.6
2.6
-1.6
-1.0
-3.1
-1.7
2.9
2.2
2.8
6.7
-2.9
1.8
2.7
0.4
-2.2
-1.6
0.8
-1.5
3.0
2.0
3.0
5.8
-3.3
5.2
2.7
0.5
-2.2
-4.6
3.0
-2.1
1.7
3.1
2.1
6.1
-1.3
2.6
2.3
0.0
-1.1
-2.1
0.6
-1.1
3.6
2.5
2.9
5.1
-1.4
2.4
3.0
0.8
-1.8
-3.4
2.8
-1.5
1.5
1.8
2.2
2.9
2.2
1.5
1.9
0.1
-0.8
-3.4
3.7
-0.9
3.2
2.5
2.4
1.3
5.8
0.8
2.9
1.0
0.2
-2.4
-1.0
-0.8
3.8
2.1
2.2
1.3
6.9
-0.3
3.1
1.1
0.6
-0.3
-2.2
-0.2
3.9
2.0
2.9
2.2
5.0
-0.2
3.3
1.5
-0.5
-2.4
0.8
-0.8
3.1
2.1
2.4
1.9
5.0
0.4
2.8
0.9
0.37
-0.14
0.12
0.36
1.29
0.20
0.23
0.07
0.07
0.00
1.86
2.22
-0.38
-0.15
-0.23
-0.75
0.58
0.18
0.18
0.29
-0.10
0.01
1.13
0.38
-0.54
-0.24
0.06
-0.72
0.58
0.16
0.20
0.26
-0.11
0.04
1.13
0.41
-0.53
-0.69
0.24
-0.98
0.34
0.24
0.13
0.28
-0.05
0.02
0.97
-0.01
-0.27
-0.30
0.05
-0.53
0.69
0.20
0.18
0.23
-0.05
0.02
1.27
0.74
-0.44
-0.48
0.24
-0.68
0.30
0.14
0.14
0.13
0.07
0.01
0.79
0.11
-0.19
-0.48
0.26
-0.41
0.65
0.20
0.16
0.06
0.20
0.01
1.26
0.85
0.04
-0.36
-0.07
-0.39
0.75
0.18
0.15
0.06
0.22
0.00
1.36
0.97
0.14
-0.04
-0.18
-0.08
0.81
0.16
0.19
0.11
0.17
0.00
1.44
1.36
-0.11
-0.34
0.06
-0.39
0.63
0.17
0.16
0.09
0.17
0.00
1.21
0.83
0.02
0.00
0.00
0.02
0.04
-0.02
0.01
0.00
0.01
0.00
0.03
0.05
0.02
0.00
0.00
0.02
0.00
-0.02
0.01
0.00
0.01
0.00
-0.01
0.01
0.02
0.00
0.00
0.02
0.02
-0.04
0.01
0.00
0.01
0.00
0.00
0.02
0.21
-0.13
0.04
0.12
0.17
0.04
0.01
-0.06
0.02
0.00
0.18
0.29
0.07
-0.03
0.01
0.04
0.06
-0.01
0.01
-0.01
0.01
0.00
0.05
0.10
-0.03
-0.16
0.05
-0.14
-0.08
-0.10
-0.04
-0.02
0.04
0.00
-0.20
-0.34
0.04
-0.18
0.01
-0.13
-0.10
-0.09
-0.02
0.08
0.04
-0.01
-0.10
-0.23
0.11
-0.18
0.07
0.00
-0.12
-0.10
-0.03
0.05
0.03
-0.01
-0.17
-0.18
0.19
-0.16
0.07
0.09
0.03
-0.03
-0.03
0.03
0.05
-0.01
0.04
0.13
0.08
-0.17
0.05
-0.05
-0.07
-0.08
-0.03
0.03
0.04
-0.01
-0.11
-0.15
0.06
-0.02
-0.05
0.25
0.06
-0.39
-0.24
-0.20
-0.17
-0.25
Annual Change (% per annum)

North America
-3.7
-0.1
3.3
3.6
1.3
2.0
Europe
-4.7
-5.1
-1.3
2.3
2.0
-0.5
Pacific
-4.6
1.2
0.4
4.7
0.6
1.7
Total OECD
-4.2
-1.5
1.3
3.3
1.4
1.1
Asia
4.4
12.0
7.1
3.5
6.9
7.2
Middle East
3.5
5.0
3.4
2.9
4.3
3.8
Latin America
0.0
4.6
5.2
6.0
4.5
5.1
FSU
-1.2
8.1
6.5
5.3
7.3
6.8
Africa
1.6
-1.6
2.1
2.3
5.4
2.0
Europe
-6.3
-7.5
-6.9
-3.7
1.3
-4.2
Total Non-OECD
2.5
7.6
5.4
3.7
5.9
5.6
World
-1.2
2.6
3.2
3.5
3.5
3.2
Annual Change (mb/d)
North America
-0.89
-0.01
0.75
0.83
0.31
0.47
Europe
-0.73
-0.77
-0.18
0.33
0.29
-0.08
Pacific
-0.37
0.10
0.03
0.34
0.05
0.13
Total OECD
-1.98
-0.69
0.60
1.50
0.65
0.52
Asia
0.77
2.04
1.30
0.64
1.31
1.32
Middle East
0.25
0.35
0.26
0.24
0.32
0.29
Latin America
0.00
0.27
0.31
0.36
0.27
0.30
FSU
-0.05
0.33
0.26
0.23
0.31
0.28
Africa
0.05
-0.06
0.07
0.08
0.18
0.07
Europe
-0.05
-0.05
-0.05
-0.03
0.01
-0.03
Total Non-OECD
0.98
2.87
2.14
1.52
2.40
2.23
World
-1.00
2.19
2.74
3.03
3.04
2.75
Revisions to Oil Demand from Last Month's Report (mb/d)
North America
0.00
0.00
0.00
0.03
0.00
0.01
Europe
0.00
0.00
0.00
0.00
0.00
0.00
Pacific
0.00
0.00
0.00
0.00
0.00
0.00
Total OECD
0.00
0.00
0.00
0.03
0.00
0.01
Asia
0.00
0.00
0.04
0.05
0.05
0.04
Middle East
0.00
0.00
0.00
0.00
0.00
0.00
Latin America
0.00
-0.01
-0.01
-0.01
-0.01
-0.01
FSU
0.00
0.00
0.00
0.00
0.00
0.00
Africa
0.00
0.00
0.00
0.00
0.00
0.00
Europe
0.00
0.00
0.00
0.00
0.00
0.00
Total Non-OECD
0.00
-0.01
0.03
0.04
0.05
0.03
World
0.00
-0.01
0.03
0.07
0.05
0.04
Revisions to Oil Demand Growth from Last Month's Report (mb/d)
World
0.00
-0.01
0.03
0.07
0.05
0.04
* France, Germany, Italy, Spain and UK
10 F EBRUARY 2012
55
T ABLES
Table 2a
Table 2a - OECD Regional Oil Demand
OECD REGIONAL OIL DEMAND1
Latest month vs.

2010
2011
4Q10
1Q11
2Q11
3Q11
Sep 11
Oct 11 Nov 11
LPG&Ethane
Naphtha
Motor Gasoline
Jet/Kerosene
Gasoil/Diesel Oil
Residual Fuel Oil
Other Products
2.95
0.37
10.57
1.65
4.82
0.93
2.46
2.96
0.35
10.31
1.65
4.94
0.85
2.43
3.12
0.33
10.51
1.63
5.01
0.89
2.36
3.31
0.37
10.14
1.60
5.04
0.97
2.35
2.71
0.36
10.45
1.68
4.77
0.87
2.47
2.77
0.34
10.49
1.71
4.85
0.76
2.64
2.81
0.31
10.33
1.63
5.02
0.84
2.46
2.94
0.36
10.20
1.56
5.04
0.78
2.33
Total
23.76
23.49
23.85
23.78
23.31
23.56
23.41
0.96
1.26
2.21
1.27
6.13
1.27
1.47
0.98
1.16
2.12
1.26
6.04
1.24
1.49
0.96
1.27
2.14
1.26
6.43
1.30
1.46
1.04
1.27
2.02
1.20
6.04
1.29
1.32
0.96
1.17
2.18
1.27
5.73
1.22
1.57
0.94
1.13
2.20
1.35
6.17
1.25
1.63
14.58
14.28
14.83
14.18
14.11
LPG&Ethane
Naphtha
Motor Gasoline
Jet/Kerosene
Gasoil/Diesel Oil
Residual Fuel Oil
Other Products
0.84
1.68
1.57
0.87
1.62
0.74
0.49
0.84
1.69
1.54
0.85
1.63
0.76
0.55
0.83
1.75
1.59
0.98
1.70
0.73
0.48
0.88
1.78
1.51
1.18
1.67
0.80
0.54
Total
7.82
7.86
8.07
LPG&Ethane
Naphtha
Motor Gasoline
Jet/Kerosene
Gasoil/Diesel Oil
Residual Fuel Oil
Other Products
4.76
3.31
14.36
3.80
12.58
2.94
4.42
4.77
3.20
13.97
3.76
12.61
2.85
4.48
Total
46.16
45.64
Oct 11
Nov 10
3.07
0.34
10.12
1.64
5.17
0.74
2.30
0.13
-0.02
-0.09
0.08
0.13
-0.04
-0.03
0.12
-0.01
-0.27
0.00
0.23
-0.21
-0.10
23.21
23.38
0.17
-0.25
0.95
1.09
2.21
1.38
6.41
1.25
1.69
0.92
1.03
2.09
1.28
6.31
1.23
1.47
0.98
1.08
2.09
1.15
6.22
1.15
1.51
0.06
0.05
0.00
-0.12
-0.09
-0.08
0.03
0.02
-0.25
-0.08
-0.09
-0.23
-0.11
-0.06
14.69
14.99
14.32
14.18
-0.14
-0.80
0.81
1.55
1.47
0.64
1.53
0.65
0.47
0.79
1.73
1.61
0.63
1.59
0.76
0.56
0.77
1.70
1.54
0.69
1.60
0.78
0.60
0.78
1.62
1.50
0.79
1.64
0.75
0.64
0.83
1.74
1.56
0.88
1.72
0.81
0.57
0.05
0.11
0.05
0.08
0.07
0.06
-0.07
-0.02
-0.03
-0.04
-0.10
-0.03
0.08
0.04
8.35
7.11
7.68
7.69
7.73
8.09
0.36
-0.09
4.91
3.36
14.24
3.88
13.14
2.92
4.30
5.23
3.43
13.67
3.98
12.75
3.06
4.20
4.48
3.08
14.11
3.58
12.04
2.74
4.51
4.51
3.20
14.31
3.70
12.62
2.77
4.83
4.53
3.11
14.08
3.70
13.03
2.87
4.76
4.63
3.01
13.79
3.63
13.00
2.76
4.44
4.88
3.16
13.76
3.67
13.11
2.69
4.37
0.24
0.15
-0.03
0.04
0.11
-0.06
-0.07
0.11
-0.29
-0.38
-0.19
-0.03
-0.24
-0.12
46.75
46.31
44.54
45.93
46.09
45.27
45.65
0.38
-1.14
North America
Europe
LPG&Ethane
Naphtha
Motor Gasoline
Jet/Kerosene
Gasoil/Diesel Oil
Residual Fuel Oil
Other Products
Total
Pacific
OECD
1 Demand, measured as deliveries from refineries and primary stocks, comprises inland deliveries, international bunkers and refinery fuel. It includes crude for direct burning, oil from
non-conventional sources and other sources of supply. Jet/kerosene comprises jet kerosene and non-aviation kerosene. Gasoil comprises diesel, light heating oil and other gasoils.
North America comprises US 50 states, US territories, Mexico and Canada.
2 Latest official OECD submissions (MOS).
56
10 F EBRUARY 2012
T ABLES
Table 2b
Table 2b - OECD Oil Demand and % Growth in Demand in Selected

OECD Countries
1
OIL DEMAND IN SELECTED OECD COUNTRIES
Latest month vs.

2010
United States3
LPG
Naphtha
Motor Gasoline
Jet/Kerosene
Gasoil
Residual Fuel Oil
Other Products
Total
Japan
LPG
Naphtha
Motor Gasoline
Jet/Kerosene
Diesel
Other Gasoil
Residual Fuel Oil
Other Products
Total
Germany
LPG
Naphtha
Motor Gasoline
Jet/Kerosene
Diesel
Other Gasoil
Residual Fuel Oil
Other Products
Total
Italy
LPG
Naphtha
Motor Gasoline
Jet/Kerosene
Diesel
Other Gasoil
Residual Fuel Oil
Other Products
Total
France
LPG
Naphtha
Motor Gasoline
Jet/Kerosene
Diesel
Other Gasoil
Residual Fuel Oil
Other Products
Total
United Kingdom
LPG
Naphtha
Motor Gasoline
Jet/Kerosene
Diesel
Other Gasoil
Residual Fuel Oil
Other Products
Total
Canada
LPG
Naphtha
Motor Gasoline
Jet/Kerosene
Diesel
Other Gasoil
Residual Fuel Oil
Other Products
Total
2011
2.17
2.16
0.26
0.26
8.99
8.73
1.45
1.45
3.80
3.87
0.54
0.48
1.97
1.93
19.18 18.89
4Q10
1Q11
2Q11
3Q11
Sep 11
Oct 11 Nov 11
Oct 11
Nov 10
2.32
0.22
8.92
1.44
3.94
0.52
1.87
19.23
2.47
0.27
8.61
1.40
3.95
0.61
1.86
19.17
1.96
0.27
8.87
1.49
3.75
0.51
1.97
18.82
1.99
0.25
8.89
1.50
3.78
0.36
2.12
18.89
2.05
0.23
8.75
1.43
3.94
0.47
1.96
18.82
2.16
0.28
8.63
1.37
3.95
0.40
1.84
18.62
2.24
0.26
8.54
1.44
4.06
0.39
1.83
18.76
0.09
-0.02
-0.09
0.07
0.11
-0.01
-0.01
0.14
0.10
0.03
-0.28
0.00
0.19
-0.16
-0.09
-0.22
0.48
0.77
1.00
0.55
0.41
0.43
0.40
0.41
4.45
0.50
0.72
0.98
0.53
0.41
0.41
0.45
0.49
4.49
0.47
0.81
1.00
0.62
0.43
0.44
0.39
0.40
4.57
0.54
0.79
0.95
0.80
0.41
0.48
0.42
0.47
4.86
0.50
0.65
0.92
0.36
0.39
0.36
0.36
0.38
3.92
0.45
0.74
1.04
0.34
0.41
0.36
0.48
0.51
4.32
0.44
0.70
0.98
0.38
0.42
0.35
0.48
0.55
4.29
0.46
0.66
0.95
0.47
0.42
0.38
0.48
0.57
4.41
0.50
0.72
0.97
0.54
0.43
0.41
0.51
0.54
4.62
0.04
0.06
0.02
0.06
0.00
0.03
0.03
-0.03
0.21
0.03
-0.10
-0.03
-0.07
-0.02
-0.03
0.12
0.09
0.00
0.10
0.41
0.46
0.18
0.67
0.43
0.15
0.09
2.49
0.10
0.39
0.46
0.18
0.68
0.36
0.15
0.11
2.42
0.09
0.41
0.45
0.18
0.69
0.47
0.16
0.09
2.53
0.10
0.44
0.43
0.17
0.63
0.37
0.16
0.05
2.35
0.10
0.40
0.47
0.19
0.67
0.23
0.14
0.12
2.34
0.11
0.39
0.47
0.19
0.71
0.42
0.15
0.12
2.55
0.10
0.37
0.48
0.19
0.74
0.43
0.14
0.12
2.56
0.08
0.33
0.48
0.18
0.68
0.47
0.14
0.14
2.50
0.09
0.34
0.48
0.17
0.73
0.38
0.14
0.15
2.47
0.00
0.01
0.00
-0.02
0.05
-0.09
0.00
0.02
-0.03
0.00
-0.10
0.01
-0.01
-0.01
-0.07
-0.02
0.05
-0.14
0.11
0.12
0.24
0.10
0.49
0.12
0.13
0.23
1.53
0.10
0.09
0.23
0.10
0.49
0.11
0.11
0.23
1.46
0.11
0.11
0.24
0.09
0.50
0.14
0.12
0.25
1.56
0.12
0.11
0.22
0.09
0.47
0.11
0.10
0.21
1.43
0.08
0.10
0.24
0.10
0.51
0.09
0.11
0.24
1.47
0.08
0.08
0.24
0.12
0.50
0.10
0.13
0.22
1.47
0.09
0.09
0.24
0.12
0.52
0.11
0.12
0.24
1.54
0.09
0.08
0.23
0.11
0.50
0.13
0.12
0.21
1.47
0.10
0.08
0.22
0.08
0.49
0.13
0.09
0.22
1.41
0.01
0.01
-0.01
-0.03
-0.01
0.00
-0.04
0.01
-0.06
-0.01
-0.03
-0.03
-0.01
-0.02
0.00
-0.02
-0.04
-0.14
0.15
0.13
0.19
0.15
0.69
0.30
0.09
0.17
1.86
0.14
0.13
0.18
0.15
0.70
0.27
0.09
0.17
1.82
0.17
0.10
0.18
0.14
0.69
0.34
0.09
0.15
1.86
0.17
0.13
0.17
0.14
0.69
0.35
0.08
0.13
1.86
0.12
0.14
0.20
0.15
0.71
0.19
0.08
0.19
1.79
0.12
0.13
0.19
0.16
0.71
0.28
0.08
0.20
1.87
0.12
0.11
0.18
0.16
0.73
0.32
0.09
0.23
1.95
0.13
0.10
0.17
0.15
0.70
0.31
0.09
0.16
1.81
0.14
0.12
0.16
0.14
0.69
0.24
0.10
0.17
1.76
0.01
0.02
-0.01
-0.01
-0.01
-0.07
0.01
0.01
-0.05
-0.03
0.01
-0.01
0.00
0.02
-0.06
0.01
0.00
-0.06
0.14
0.03
0.35
0.33
0.45
0.12
0.06
0.14
1.62
0.14
0.03
0.33
0.33
0.45
0.12
0.06
0.15
1.60
0.13
0.02
0.34
0.34
0.44
0.12
0.07
0.15
1.60
0.14
0.03
0.34
0.34
0.45
0.11
0.07
0.15
1.62
0.15
0.03
0.34
0.32
0.45
0.11
0.06
0.16
1.61
0.13
0.02
0.33
0.33
0.45
0.13
0.06
0.15
1.61
0.13
0.02
0.34
0.36
0.47
0.13
0.07
0.15
1.66
0.12
0.02
0.33
0.33
0.46
0.11
0.06
0.14
1.57
0.12
0.03
0.34
0.33
0.48
0.12
0.06
0.13
1.59
-0.01
0.01
0.01
0.00
0.02
0.01
-0.01
-0.01
0.02
-0.02
0.00
-0.01
-0.03
0.03
0.00
-0.01
-0.03
-0.05
0.35
0.08
0.74
0.11
0.22
0.31
0.10
0.30
2.21
0.37
0.08
0.73
0.11
0.22
0.33
0.09
0.29
2.23
0.36
0.08
0.73
0.11
0.22
0.34
0.11
0.30
2.25
0.39
0.09
0.69
0.11
0.22
0.36
0.11
0.28
2.25
0.35
0.08
0.74
0.10
0.22
0.28
0.09
0.29
2.15
0.37
0.08
0.77
0.12
0.23
0.32
0.08
0.31
2.29
0.35
0.08
0.75
0.12
0.23
0.33
0.09
0.31
2.26
0.36
0.06
0.74
0.10
0.22
0.33
0.10
0.29
2.21
0.39
0.07
0.73
0.11
0.22
0.35
0.11
0.26
2.23
0.02
0.00
-0.01
0.01
0.00
0.01
0.02
-0.03
0.03
0.01
-0.01
0.01
-0.01
0.00
0.01
0.00
-0.04
-0.03
1 Demand, measured as deliveries from refineries and primary stocks, comprises inland deliveries, international bunkers and refinery fuel. It includes crude for direct burning, oil from
non-conventional sources and other sources of supply. Jet/kerosene comprises jet kerosene and non-aviation kerosene. Gasoil comprises diesel, light heating oil and other gasoils.
2 Latest official OECD submissions (MOS).
3 US figures exclude US territories.
10 F EBRUARY 2012
57
T ABLES
Table 3
Table 3 - World Oil Production
WORLD OIL PRODUCTION

2010
2011
8.13
3.70
2.36
2.31
2.03
0.53
0.80
1.73
2.08
1.55
1.25
0.47
2.53
9.05
3.58
2.67
2.50
2.21
0.59
0.82
1.64
2.18
0.46
1.28
0.50
2.52
29.49
5.34
29.99
5.78
Total OPEC
34.83
OPEC: Historical Composition6
34.83
OECD
North America
United States5
Mexico
Canada
Europe
UK
Norway
Others
Pacific
Australia
Others
14.10
7.77
2.96
3.37
4.14
1.36
2.14
0.65
0.61
0.51
0.10
14.54
8.10
2.94
3.50
3.83
1.12
2.03
0.67
0.52
0.43
0.09
Total OECD
18.86
2012
3Q11
4Q11
1Q12
2Q12
9.34
3.53
2.67
2.53
2.26
0.60
0.82
1.69
2.26
0.04
1.28
0.49
2.42
9.38
3.51
2.68
2.54
2.34
0.60
0.82
1.72
2.06
0.55
1.29
0.49
2.52
29.93
5.79
30.51
5.91
35.77
35.72
35.77
35.72
14.99
8.40
2.87
3.73
3.78
1.12
2.00
0.66
0.65
0.57
0.08
14.55
8.10
2.92
3.53
3.62
0.94
1.99
0.69
0.51
0.42
0.09
14.97
8.40
2.92
3.66
3.84
1.13
2.03
0.67
0.55
0.47
0.08
15.04
8.31
2.91
3.82
3.85
1.16
2.02
0.67
0.61
0.52
0.09
14.86
8.48
2.89
3.49
3.71
1.13
1.91
0.67
0.64
0.56
0.08
18.89
19.42
18.68
19.36
19.49
13.55
10.45
3.10
13.62
10.58
3.04
13.80
10.71
3.08
13.54
10.58
2.96
13.74
10.67
3.07
Asia
China
Malaysia
India
Indonesia
Others
7.80
4.10
0.72
0.86
0.97
1.14
7.67
4.13
0.65
0.90
0.91
1.08
7.67
4.17
0.63
0.92
0.86
1.10
7.57
4.06
0.65
0.89
0.91
1.06
Europe
0.14
0.14
0.14
Latin America
Brazil5
Argentina
Colombia
Others
4.07
2.14
0.69
0.79
0.45
4.21
2.19
0.67
0.91
0.44
4.43
2.34
0.66
1.01
0.42
1.74
0.87
0.39
0.30
0.19
1.64
0.89
0.33
0.23
0.20
2.52
0.70
0.25
1.58
Total Non-OECD
Processing Gains4
Global Biofuels5
3Q12
Nov 11
Dec 11
Jan 12
9.45
3.55
2.68
2.52
2.37
0.60
0.82
1.69
2.10
0.55
1.29
0.50
2.53
9.55
3.45
2.69
2.58
2.30
0.60
0.82
1.75
2.06
0.75
1.29
0.48
2.50
9.55
3.45
2.65
2.58
2.26
0.60
0.82
1.73
2.04
0.98
1.29
0.48
2.48
30.64
5.91
30.82
5.91
30.90
6.14
36.41
36.55
36.72
37.04
36.41
36.55
36.72
37.04
14.90
8.35
2.84
3.71
3.65
1.01
1.99
0.65
0.67
0.59
0.08
15.02
8.45
2.92
3.65
3.84
1.10
2.05
0.69
0.54
0.45
0.08
15.04
8.43
2.91
3.70
3.85
1.21
2.00
0.65
0.60
0.51
0.09
14.99
8.25
2.91
3.83
3.85
1.15
2.03
0.67
0.55
0.47
0.09
19.21
19.23
19.40
19.49
19.39
13.77
10.66
3.12
13.86
10.72
3.15
13.68
10.74
2.94
13.82
10.70
3.13
13.68
10.63
3.05
13.78
10.68
3.10
7.61
4.06
0.65
0.91
0.90
1.10
7.70
4.14
0.64
0.93
0.88
1.12
7.66
4.15
0.63
0.92
0.86
1.10
7.63
4.14
0.62
0.92
0.85
1.09
7.63
4.05
0.66
0.90
0.89
1.13
7.76
4.18
0.63
0.94
0.90
1.11
7.69
4.13
0.64
0.92
0.89
1.12
0.14
0.14
0.14
0.14
0.14
0.14
0.14
0.14
4.19
2.16
0.67
0.92
0.44
4.32
2.25
0.69
0.95
0.43
4.34
2.30
0.64
0.96
0.43
4.42
2.31
0.67
1.00
0.43
4.46
2.34
0.67
1.03
0.42
4.35
2.27
0.69
0.96
0.43
4.35
2.30
0.68
0.93
0.44
4.30
2.31
0.62
0.93
0.44
1.56
0.91
0.27
0.18
0.19
1.66
0.89
0.32
0.24
0.20
1.49
0.89
0.22
0.18
0.20
1.55
0.89
0.28
0.18
0.20
1.54
0.90
0.27
0.17
0.20
1.56
0.92
0.27
0.18
0.19
1.49
0.89
0.22
0.18
0.20
1.53
0.89
0.26
0.18
0.20
1.54
0.88
0.28
0.18
0.20
2.52
0.69
0.24
1.59
2.43
0.68
0.25
1.50
2.53
0.69
0.24
1.60
2.50
0.68
0.25
1.57
2.34
0.68
0.24
1.41
2.39
0.68
0.24
1.47
2.49
0.67
0.25
1.56
2.50
0.68
0.25
1.57
2.48
0.68
0.25
1.56
2.45
0.69
0.25
1.52
29.82
29.81
30.02
29.63
29.79
29.84
30.00
29.95
29.92
29.95
29.91
2.10
2.17
2.26
2.14
2.23
2.28
2.23
2.24
2.23
2.23
2.28
1.83
1.84
1.94
2.16
1.82
1.59
1.94
2.24
1.84
1.68
1.59
TOTAL NON-OPEC6
52.60
52.71
53.64
52.60
53.20
53.20
53.38
53.65
53.40
53.35
53.17
Non-OPEC: Historical Composition6
52.60
52.71
53.64
52.60
53.20
53.20
53.38
53.65
53.40
53.35
53.17
TOTAL SUPPLY
87.43
88.48
88.33
89.62
89.95
90.07
90.21
OPEC
Crude Oil
Saudi Arabia
Iran
Iraq
UAE
Kuwait
Neutral Zone
Qatar
Angola
Nigeria
Libya
Algeria
Ecuador
Venezuela
Total Crude Oil6
Total NGLs1,6
6
6.34
6.14
6.19
6.49
NON-OPEC
NON-OECD
Former USSR
Russia
Others
Middle East
Oman
Syria
Yemen
Others
Africa
Egypt
Gabon
Others
1 Includes condensates reported by OPEC countries, oil from non-conventional sources, e.g. Venezuelan Orimulsion (but not Orinoco extra-heavy oil),
and non-oil inputs to Saudi Arabian MTBE. Orimulsion production reportedly ceased from January 2007.
2 Comprises crude oil, condensates, NGLs and oil from non-conventional sources
3 Includes small amounts of production from Israel, Jordan and Bahrain.
4 Net volumetric gains and losses in refining and marine transportation losses.
5 As of the July 2010 OMR, Global Biofuels comprise all world biofuel production including fuel ethanol from the US and Brazil.
6 Total OPEC comprises all countries which were OPEC members at 1 January 2009. OPEC Historical Composition comprises countries which were OPEC members at that point in time.
Total Non-OPEC excludes all countries that were OPEC members at 1 January 2009. Non-OPEC Historical Composition excludes countries that were OPEC members at that point in time.
58
10 F EBRUARY 2012
T ABLES
Table 4
Table 4 - OECD Industry Stocks and

Quarterly Stock Changes/OECD Government1
OECD
AND QUARTERLY STOCK CHANGES
Controlled Stocks
andINDUSTRY
QuarterlySTOCKS
Stock Changes
RECENT MONTHLY STOCKS
PRIOR YEARS' STOCKS
in Million Barrels
STOCK CHANGES
in Million Barrels
in mb/d
Aug2011
Sep2011
Oct2011
Nov2011
Dec2011*
Dec2008
Dec2009
Dec2010
1Q2011
2Q2011
3Q2011
4Q2011
484.1
246.2
229.6
46.1
709.7
466.7
250.6
227.8
42.4
707.3
477.5
243.1
218.1
44.4
689.1
475.0
254.5
216.7
47.2
697.9
468.7
262.6
220.0
44.1
700.8
448.7
242.9
216.6
44.1
683.2
447.4
253.4
239.4
44.4
695.9
476.2
252.4
238.7
49.5
705.1
0.25
-0.03
-0.24
-0.05
-0.58
0.02
-0.01
-0.04
-0.01
0.29
-0.36
0.02
0.16
-0.02
0.30
0.02
0.13
-0.09
0.02
-0.07
1360.5
1341.8
1334.4
1332.8
1325.9
1281.7
1286.0
1330.7
-0.39
0.49
0.03
-0.17
Europe
Crude
Motor Gasoline
Middle Distillate
Residual Fuel Oil
3
Total Products
310.5
90.8
273.7
67.7
552.9
308.3
89.0
265.4
64.1
538.6
299.6
90.9
260.0
63.1
535.1
303.5
94.3
262.9
63.1
538.3
288.2
93.4
267.7
60.5
539.3
342.0
101.3
276.8
79.7
574.2
332.6
100.8
287.0
71.8
572.2
322.4
96.6
277.8
68.4
555.9
0.01
0.04
0.09
-0.01
0.11
-0.05
-0.09
-0.13
-0.03
-0.22
-0.11
-0.03
-0.09
0.00
-0.08
-0.22
0.05
0.03
-0.04
0.01
Total4
929.6
911.3
900.6
911.3
895.7
990.6
971.7
948.5
0.06
-0.24
-0.23
-0.17
Pacific
Crude
Motor Gasoline
Middle Distillate
Residual Fuel Oil
3
Total Products
155.2
25.1
70.0
19.4
180.7
157.0
24.4
67.8
20.2
181.0
155.1
24.0
66.6
19.9
180.5
155.8
23.4
68.3
19.7
178.0
156.0
21.8
60.6
19.1
163.3
162.6
20.6
64.8
20.0
174.0
160.5
22.9
62.2
18.6
160.9
158.0
23.2
59.7
18.9
162.7
0.00
0.01
-0.06
0.02
-0.09
0.01
0.01
0.14
0.01
0.18
-0.03
-0.01
0.01
-0.01
0.10
-0.01
-0.03
-0.08
-0.01
-0.19
409.7
411.5
407.1
407.6
389.2
406.6
383.2
390.4
-0.10
0.26
0.07
-0.24
949.8
362.1
573.4
133.1
1443.3
932.1
363.9
561.1
126.7
1426.9
932.2
358.0
544.6
127.4
1404.7
934.3
372.1
547.8
129.9
1414.3
912.9
377.8
548.2
123.8
1403.4
953.4
364.9
558.2
143.8
1431.4
940.5
377.1
588.6
134.9
1429.1
956.6
372.2
576.1
136.8
1423.6
0.26
0.02
-0.21
-0.04
-0.56
-0.02
-0.09
-0.03
-0.04
0.25
-0.49
-0.02
0.07
-0.03
0.33
-0.21
0.15
-0.14
-0.03
-0.26
2699.8
2664.6
2642.0
2651.6
2610.8
2679.0
2640.9
2669.6
-0.43
0.50
-0.13
-0.58
North America
Crude
Motor Gasoline
Middle Distillate
Residual Fuel Oil
Total Products3
Total4
Total
Total OECD
Crude
Motor Gasoline
Middle Distillate
Residual Fuel Oil
Total Products3
Total
OECD GOVERNMENT-CONTROLLED STOCKS AND QUARTERLY STOCK CHANGES

RECENT MONTHLY STOCKS
PRIOR YEARS' STOCKS
in Million Barrels
STOCK CHANGES
in Million Barrels
in mb/d
Aug2011
Sep2011
Oct2011
Nov2011
Dec2011*
Dec2008
Dec2009
Dec2010
1Q2011
2Q2011
3Q2011
4Q2011
North America
Crude
Products
696.5
0.0
696.0
0.0
696.0
0.0
696.0
0.7
696.0
0.7
701.8
2.0
726.6
2.0
726.6
2.0
0.00
-0.02
0.00
0.00
-0.33
0.00
0.00
0.01
Europe
Crude
Products
183.1
236.5
183.0
235.9
182.8
235.5
184.2
235.5
185.7
234.0
186.8
228.6
184.2
240.8
186.5
234.9
-0.01
-0.03
-0.01
0.05
-0.02
-0.01
0.03
-0.02
Pacific
Crude
Products
390.6
18.7
390.7
18.7
391.1
20.0
392.6
20.0
393.5
20.0
387.2
19.2
389.0
20.0
389.6
20.0
0.02
0.00
0.00
0.00
0.00
-0.01
0.03
0.01
Total OECD
Crude
Products
1270.2
255.2
1269.6
254.6
1269.9
255.5
1272.7
256.1
1275.2
254.7
1275.9
249.7
1299.8
262.8
1302.5
256.9
0.01
-0.05
-0.01
0.05
-0.36
-0.03
0.06
0.00
Total4
1526.8
1525.6
1526.7
1530.1
1531.2
1526.6
1564.1
1560.7
-0.03
0.04
-0.38
0.06
* estimated
1 Stocks are primary national territory stocks on land (excluding utility stocks and including pipeline and entrepot stocks where known) and include stocks held by
industry to meet IEA, EU and national emergency reserve commitments and are subject to government control in emergencies.
2 Closing stock levels.
3 Total products includes gasoline, middle distillates, fuel oil and other products.
4 Total includes NGLs, refinery feedstocks, additives/oxygenates and other hydrocarbons.
5 Includes government-owned stocks and stock holding organisation stocks held for emergency purposes.
10 F EBRUARY 2012
59
T ABLES
Table 5
1
Table 5 - Total Stocks on
LandSTOCKS
in OECD
OECD Stocks
TOTAL
ON Countries/Total
LAND IN OECD COUNTRIES
('millions of barrels' and 'days')
End December 2010

Stock
Level
North America
Canada
Mexico
United States4
Days Fwd2
Demand
End March 2011
End June 2011
End September 2011
End December 2011
Stock Days Fwd

Level Demand
Stock Days Fwd

Level Demand
Stock Days Fwd

Level Demand
Stock Days Fwd

Level Demand
196.5
44.5
1796.1
86
22
94
185.2
45.0
1769.5
84
22
94
189.7
46.5
1807.6
80
22
96
188.6
46.1
1780.9
2059.2
87
2021.7
87
2065.9
88
2037.8
87
2022.5
87
38.1
588.3
165.4
8.2
39
121
70
51
39.1
575.4
170.2
8.0
39
147
83
53
39.5
593.2
175.2
8.2
39
137
79
56
38.2
601.1
173.6
7.9
800.0
96
792.7
111
816.0
106
820.9
99
802.7
94
19.7
33.6
21.2
26.8
27.8
168.2
286.8
34.3
15.9
9.8
133.3
0.6
125.8
20.8
65.5
22.9
8.3
133.2
32.4
36.8
58.5
88.8
77
50
117
171
127
91
122
92
119
63
93
10
129
81
123
89
109
93
94
156
101
55
19.4
37.0
21.5
21.4
26.9
167.4
289.4
33.9
17.4
10.8
131.8
0.5
125.7
21.1
62.8
23.5
9.0
132.9
33.7
36.6
58.3
92.8
77
59
106
132
133
94
124
106
124
79
90
9
124
93
109
87
111
97
101
168
85
57
19.6
38.1
21.7
21.5
27.0
166.7
290.8
32.6
17.3
10.2
130.0
0.6
117.8
23.5
64.6
23.3
8.9
130.1
32.5
37.2
56.6
84.9
70
58
109
134
130
89
114
99
118
73
88
9
114
96
105
86
104
94
101
150
73
53
18.0
36.7
20.1
22.4
27.0
160.0
282.6
30.9
16.2
11.3
130.1
0.7
114.3
24.5
65.2
21.9
8.3
131.2
32.6
37.0
56.4
84.1
Total
1371.1
97
1374.0
97
1355.4
92
1331.5
94
1316.8
96
Total OECD
4230.3
-
91
147
4188.5
-
94
146
4237.3
-
92
147
4190.2
-
92
145
4142.0
-
91
Total
Pacific
Australia
Japan
Korea
New Zealand
Total
Europe
Austria
Belgium
Czech Republic
Denmark
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Luxembourg
Netherlands
Norway
Poland
Portugal
Slovak Republic
Spain
Sweden
Switzerland
Turkey
United Kingdom
DAYS OF IEA Net Imports
1 Total Stocks are industry and government-controlled stocks (see breakdown in table below). Stocks are primary national territory stocks on land (excluding utility stocks
and including pipeline and entrepot stocks where known) they include stocks held by industry to meet IEA, EU and national emergency reserves commitments and are
subject to government control in emergencies.
2 Note that days of forward demand represent the stock level divided by the forward quarter average daily demand and is very different from the days of net
imports used for the calculation of IEA Emergency Reserves.
3 End December 2011 forward demand figures are IEA Secretariat forecasts.
4 US figures exclude US territories. Total includes US territories.
5 Data not available for Iceland.
6 Reflects stock levels and prior calendar year's net imports adjusted according to IEA emergency reserve definitions (see www.iea.org/netimports.asp).
Net exporting IEA countries are excluded.
TOTAL OECD STOCKS

CLOSING STOCKS
Total
4Q2008
1Q2009
2Q2009
3Q2009
4Q2009
1Q2010
2Q2010
3Q2010
4Q2010
1Q2011
2Q2011
3Q2011
4Q2011
4206
4278
4306
4327
4205
4241
4319
4296
4230
4188
4237
4190
4142
Industry
Government
controlled
Millions of Barrels
1527
1547
1561
1564
1564
1567
1562
1549
1561
1558
1561
1526
1531
2679
2731
2745
2763
2641
2675
2757
2747
2670
2631
2676
2665
2611
Total
90
96
95
94
92
94
93
92
91
94
92
92
91
Industry
Government
controlled
Days of Fwd. Demand 2
33
35
35
34
34
35
33
33
34
35
34
33
34
57
61
61
60
57
59
59
59
58
59
58
58
57
1 Includes government-owned stocks and stock holding organisation stocks held for emergency purposes.
2 Days of forward demand calculated using actual demand except in 4Q2011 (when latest forecasts are used).
60
10 F EBRUARY 2012
T ABLES
Table 6
Table 6 - IEA Member Country Destinations of Selected Crude Streams
IEA MEMBER COUNTRY DESTINATIONS OF SELECTED CRUDE STREAMS1

2008 2009 2010
4Q10 1Q11 2Q11 3Q11
Sep 11 Oct 11 Nov 11
Year Earlier
change
Nov 10
Saudi Light & Extra Light

North America
Europe
Pacific
0.70
0.70
1.22
0.52
0.59
1.28
0.69
0.66
1.21
0.75
0.69
1.26
0.71
0.70
1.33
0.72
0.79
1.14
0.47
0.93
1.21
0.31
0.82
1.27
0.67
0.90
1.22
0.96
0.89
1.26
0.81
0.81
1.50
0.15
0.08
-0.24
Saudi Medium
North America
Europe
Pacific
0.64
0.05
0.39
0.40
0.02
0.34
0.36
0.00
0.34
0.36
0.37
0.33
0.39
0.36
0.02
0.38
0.40
0.05
0.43
0.45
0.03
0.45
0.35
0.01
0.33
0.44
0.02
0.46
0.35
0.47
0.09
0.00
Saudi Heavy
North America
Europe
Pacific
0.07
0.09
0.24
0.03
0.02
0.15
0.02
0.00
0.22
0.01
0.21
0.02
0.00
0.20
0.03
0.00
0.21
0.03
0.03
0.23
0.07
0.02
0.25
0.02
0.02
0.08
0.02
0.03
0.23
0.24
-0.01
Iraqi Basrah Light

North America
Europe
Pacific
0.60
0.21
0.15
0.40
0.12
0.24
0.36
0.09
0.29
0.29
0.08
0.38
0.21
0.03
0.40
0.41
0.10
0.26
0.31
0.19
0.38
0.23
0.19
0.35
0.01
0.13
0.32
0.31
0.13
0.33
0.33
0.09
0.39
-0.02
0.04
-0.05
Iraqi Kirkuk
North America
Europe
Pacific
0.08
0.23
-
0.06
0.31
-
0.03
0.27
-
0.04
0.23
-
0.11
0.21
-
0.07
0.31
-
0.05
0.32
-
0.00
0.26
-
0.03
0.29
-
0.03
0.20
-
0.02
0.29
-
0.01
-0.09
-
Iranian Light
North America
Europe
Pacific
0.23
0.08
0.15
0.07
0.24
0.04
0.18
0.01
0.24
0.06
0.28
0.03
0.20
0.04
0.17
0.02
0.20
0.02
0.23
0.02
0.16
0.01
0.08
0.01
0.49
0.61
0.40
0.57
0.49
0.52
0.43
0.52
0.34
0.63
0.59
0.41
0.73
0.51
0.71
0.53
0.58
0.51
0.60
0.48
0.30
0.48
0.30
0.01
Venezuelan Light & Medium

North America
0.62
Europe
0.06
Pacific
0.39
0.07
-
0.14
0.02
-
0.16
0.01
-
0.06
0.03
-
0.30
0.01
-
0.24
0.02
-
0.24
0.02
-
0.32
-
0.06
0.05
-
0.26
-
-0.20
-
Venezuelan 22 API and heavier

North America
0.65
Europe
0.07
Pacific
-
0.75
0.07
-
0.86
0.06
-
0.75
0.05
-
0.89
0.04
-
0.77
0.05
-
0.70
0.06
-
0.51
0.05
-
0.68
0.04
-
0.72
0.05
-
0.82
0.03
-
-0.10
0.02
-
Mexican Maya
North America
Europe
Pacific
1.02
0.14
-
0.93
0.10
-
0.91
0.11
-
0.92
0.09
-
0.82
0.14
-
0.80
0.12
-
0.84
0.12
-
0.76
0.11
-
0.84
0.11
-
0.89
0.11
-
0.97
0.06
-
-0.08
0.06
-
Mexican Isthmus
North America
Europe
Pacific
0.01
0.01
-
0.01
0.01
-
0.04
0.02
-
0.09
0.05
-
0.05
0.01
-
0.08
0.02
-
0.06
0.00
-
0.07
-
0.07
0.01
-
0.07
-
0.11
0.02
-
-0.04
-
Russian Urals
North America
Europe
Pacific
0.05
1.81
-
0.15
1.72
-
0.08
1.80
-
0.03
1.71
-
0.01
1.76
-
1.87
-
1.52
-
1.56
-
0.05
1.57
-
1.64
-
1.57
-
0.07
-
Nigerian Light
North America
Europe
Pacific
0.68
0.29
-
0.54
0.32
0.00
0.60
0.34
-
0.58
0.49
-
0.62
0.40
0.05
0.60
0.40
0.04
0.43
0.54
0.06
0.22
0.55
0.06
0.75
0.39
0.06
0.33
0.51
0.05
0.45
0.59
-
-0.12
-0.08
-
Nigerian Medium
North America
Europe
Pacific
0.27
0.14
-
0.21
0.13
-
0.25
0.09
-
0.22
0.11
-
0.20
0.14
-
0.18
0.17
-
0.18
0.11
-
0.17
0.14
-
0.17
0.10
-
0.07
0.08
-
0.23
0.10
-
-0.17
-0.02
-
Iranian Heavy
North America
Europe
Pacific
1 Data based on monthly submissions from IEA countries to the crude oil import register (in '000 bbl), subject to availability. May differ from Table 8 of the Report.
IEA North America includes United States and Canada.
IEA Europe includes all countries in OECD Europe except Hungary. The Slovak Republic and Poland is excluded through December 2007 but included thereafter.
IEA Pacific data includes Australia, New Zealand, Korea and Japan.
2 Iraqi Total minus Kirkuk.
3 Iranian Total minus Iranian Light.
4 33 API and lighter (e.g., Bonny Light, Escravos, Qua Iboe and Oso Condensate).
10 F EBRUARY 2012
61
T ABLES
Table 7
Table 7 - Regional OECD Imports
REGIONAL OECD IMPORTS1,2

2008
Crude Oil
North America
Europe
Pacific
Total OECD
2009
Oct-11 Nov-11
Year Earlier
Nov-10 % change
2010
4Q10
1Q11
2Q11
3Q11
Sep-11
8076 7353
7343
9776 8893
9072
6605 6082
6249
24457 22329 22664
6625
9110
6479
22213
6571
8901
6645
22117
6928
8903
6086
21917
6793
9390
6255
22437
6569
9283
6271
22124
6825
8871
6217
21913
6381
9286
6436
22103
6478
9344
6708
22686
-2%
-1%
-4%
-3%
LPG
North America
Europe
Pacific
Total OECD
31
268
589
887
13
260
529
802
8
270
558
836
6
299
567
872
20
313
569
903
4
284
547
836
4
304
580
888
5
336
573
914
6
344
508
858
2
356
519
877
10
346
594
949
-81%
3%
-13%
-8%
Naphtha
North America
Europe
Pacific
Total OECD
56
298
776
1130
22
352
841
1215
36
390
900
1326
35
382
893
1309
34
292
917
1243
51
336
830
1217
43
285
906
1234
45
282
910
1237
40
284
809
1133
59
233
898
1190
45
421
892
1358
32%
-45%
1%
-12%
Gasoline
North America
Europe
Pacific
Total OECD
1077
215
90
1383
878
193
96
1167
788
174
64
1025
712
127
67
907
669
223
71
963
981
221
61
1262
703
216
70
989
591
207
63
862
612
192
83
887
749
250
86
1086
709
111
76
895
6%
126%
13%
21%
Jet & Kerosene

North America
Europe
Pacific
Total OECD
64
401
34
500
62
452
53
567
76
417
40
532
89
396
46
531
62
320
58
440
86
367
43
497
81
451
45
578
64
455
61
581
65
451
65
580
99
562
59
720
112
425
49
586
-12%
32%
20%
23%
Gasoil/Diesel
North America
Europe
Pacific
Total OECD
74
871
119
1064
55
1035
87
1177
49
1045
97
1191
14
1235
92
1340
46
1078
99
1224
30
931
153
1114
32
934
123
1089
48
1096
135
1279
5
1155
146
1306
52
1095
117
1265
5
1412
101
1518
863%
-22%
16%
-17%
Heavy Fuel Oil

North America
Europe
Pacific
Total OECD
288
458
125
871
270
534
113
917
277
529
117
923
254
502
101
857
345
505
147
997
304
582
111
997
193
651
156
1001
195
614
169
978
206
657
142
1005
250
591
184
1025
297
429
95
822
-16%
38%
94%
25%
Other Products
North America
Europe
Pacific
Total OECD
1078
734
298
2110
870
770
325
1964
805
666
335
1806
906
737
352
1996
855
683
383
1921
896
776
252
1924
903
724
343
1970
872
639
394
1905
747
665
316
1728
832
634
301
1767
883
713
402
1999
-6%
-11%
-25%
-12%
Total Products
North America
Europe
Pacific
Total OECD
2667
3245
2032
7944
2171
3595
2045
7810
2038
3491
2111
7639
2017
3678
2118
7812
2033
3415
2244
7691
2355
3497
1995
7847
1960
3566
2223
7749
1820
3630
2306
7756
1681
3749
2068
7498
2044
3722
2164
7930
2062
3856
2209
8127
-1%
-3%
-2%
-2%
10743 9524
9381
13022 12488 12562
8637 8127
8360
32401 30139 30302
8641
12788
8596
30025
8604
12316
8888
29808
9283
12401
8081
29765
8753
12955
8478
30186
8390
12913
8577
29879
8506
12620
8285
29412
8424
13008
8600
30032
8697
13200
8917
30813
-3%
-1%
-4%
-3%
Total Oil
North America
Europe
Pacific
Total OECD
1 Based on Monthly Oil Questionnaire data submitted by OECD countries in tonnes and converted to barrels.
2 Excludes intra-regional trade.
3 Includes additives.
62
10 F EBRUARY 2012
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10 February 2012

Global refinery crude throughput estimates for 1Q12 are largely

I NTERNATIONAL E NERGY A GENCY O IL M ARKET R EPORT

DONT FORGET THE BIT IN THE MIDDLE

10F EBRUARY 2011

I NTERNATIONAL E NERGY A GENCY O IL M ARKET R EPORT

Global Oil Demand (2010-2012)

1Q10 2Q10 3Q10 4Q10

1Q11 2Q11 3Q11 4Q11

1Q12 2Q12 3Q12 4Q12 2012

10F EBRUARY 2012

I NTERNATIONAL E NERGY A GENCY O IL M ARKET R EPORT

Real GDP Growth

Current vs. Previous

OMR dated 10 February 2012

OMR dated 12 October 2011

OECD, North America

China (excl. Hong Kong)

China (excl. Hong Kong)

Sources: IMF, IEA

Global Oil Demand Growth 2010/2011/2012

Global Demand Growth

10F EBRUARY 2012

I NTERNATIONAL E NERGY A GENCY O IL M ARKET R EPORT

Annual Oil Demand

Real GDP vs. Oil Demand Growth

World: Total Demand, Y-o-Y Growth

OECD Demand based on Adjusted Preliminary Submissions - December 2011

10F EBRUARY 2012

I NTERNATIONAL E NERGY A GENCY O IL M ARKET R EPORT

OECD: Total Oil Product Demand

OECD: Residual Fuel Oil Demand

Heating Degree Days - USA

US50: Heating Oil Demand

Diff to 10-year Avg

Diff to Previous Year

US50: LPG Demand

US50: Total Oil Product Demand

10F EBRUARY 2012

I NTERNATIONAL E NERGY A GENCY O IL M ARKET R EPORT

OECD Europe: Total Demand Growth

kb/d German: Total Oil Product Demand

10F EBRUARY 2012

I NTERNATIONAL E NERGY A GENCY O IL M ARKET R EPORT

Heating Degree Days -OECD Pacific

Diff to 10-year Avg

Diff to Previous Year

Korea: Total Oil Product Demand

Japan: Total Oil Product Demand

10F EBRUARY 2012

I NTERNATIONAL E NERGY A GENCY O IL M ARKET R EPORT

Outlook for Japanese Power Sector Oil Demand

Japan: Forecast Incremental Oil

Japanese Nuclear Power Generation

Apr 12 Aug 12 Dec 12

10F EBRUARY 2012

I NTERNATIONAL E NERGY A GENCY O IL M ARKET R EPORT

Non-OECD: Demand by Product

Annual Chg (kb/d)

Annual Chg (%)

LPG & Ethane

Jet Fuel & Kerosene

Residual Fuel Oil

Non-OECD: Demand Growth by Region