Oil & Gas/Chemicals | G L O B A LOI L M AR K E T UP D AT E : 16 DE CEM BE R, 201 0                                        ...
Oil & Gas/Chemicals | Global                                             Michael Lo, CFA / Cheng KhooExhibit 1. Price summ...
Oil & Gas/Chemicals | Global                                                                                       Michael...
Oil & Gas/Chemicals | Global                                                                          Michael Lo, CFA / Ch...
Oil & Gas/Chemicals | Global                                                                           Michael Lo, CFA / C...
Oil & Gas/Chemicals | Global                                                         Michael Lo, CFA / Cheng KhooExhibit 1...
Oil & Gas/Chemicals | Global                                                         Michael Lo, CFA / Cheng KhooTotal pro...
Oil & Gas/Chemicals | Global                                                             Michael Lo, CFA / Cheng KhooGasol...
Oil & Gas/Chemicals | Global                                                                           Michael Lo, CFA / C...
Oil & Gas/Chemicals | Global                                                                 Michael Lo, CFA / Cheng KhooD...
Oil & Gas/Chemicals | Global                                                                            Michael Lo, CFA / ...
Oil & Gas/Chemicals | Global                                                                                              ...
Oil & Gas/Chemicals | Global                                           Michael Lo, CFA / Cheng KhooExhibit 21. US Departme...
Nomura Oil Weekly 12.16.10
Nomura Oil Weekly 12.16.10
Nomura Oil Weekly 12.16.10
Nomura Oil Weekly 12.16.10
Nomura Oil Weekly 12.16.10
Nomura Oil Weekly 12.16.10
Nomura Oil Weekly 12.16.10
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Nomura Oil Weekly 12.16.10

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Nomura Oil Weekly 12.16.10

  1. 1. Oil & Gas/Chemicals | G L O B A LOI L M AR K E T UP D AT E : 16 DE CEM BE R, 201 0 NOMURA INTERNATIONAL (HK) LIMITEDMichael Lo, CFA +852 2252 6225 michael.lo@nomura.comCheng Khoo +852 2252 6180 cheng.khoo@nomura.com RUNNING THEMEThis week’s highlightsAs 2010 comes to a close, oil prices stand at an average US$79/bbl YTD and globaloil demand growth estimates for 2010 by IEA, EIA and OPEC at an average W E E K L Y2.0mmbbl/d y-y. For 2011, the agencies estimate an average oil demand growth of1.3mmbbl/d y-y and non-OPEC supply growth of 0.3mmbbl/d y-y. We continue to seefundamentals tightening, creating an environment of rising oil prices next year.Oil Market Update Analysts Michael Lo, CFAHappy holidays! We will be back next year. Merry Christmas & Happy New Year! +852 2252 6225 The International Energy Agency (IEA) lowered its non-OPEC supply growth michael.lo@nomura.com and OPEC NGL supply growth estimates for 2011 by 0.2mmbbl/d each, in its Cheng Khoo latest Oil Market Report released this week. This is in line with our analysis +852 2252 6180 from last week (See: Oil Market Update - ‘supply-side risks,’ dated 9 December cheng.khoo@nomura.com 2010), where we saw a downward bias to IEA’s existing non-OPEC supply estimates for 2011. The agency now estimates non-OPEC supply to grow in Saurabh Bharat 2011 by 0.6mmbbl/d y-y to 53.4mmbbl/d and OPEC NGL supply to grow by +91 22 3053 2835 0.5mmbbl/d y-y to 5.8mmbbl/d. On the demand side, the IEA has raised its saurabh.bharat@nomura.com global oil demand growth estimates for 2010 and 2011 by 0.1mmbbl/d each from last month. The agency now expects global oil demand to grow by Sanat Satyan +91 22 6723 4076 2.4mmbbl/d y-y in 2010 to 87.4mmbbl/d and further by 1.3mmbbl/d y-y in 2011 sanat.satyan@nomura.com to 88.8mmbbl/d. This revision was on stronger data from OECD North America and non-OECD Asia in 2010. On its medium-term projections, the IEA has revised its baseline estimates for supply and demand sharply upwards. However, it continues to show a tightening of fundamentals in its base case, with the OPEC spare capacity now estimated to tighten to 3.6mmbbl/d by 2015. As refiners boost output in the US, crude stocks fell by 9.9mmbbl w-w in the week ending 10 December, as per Energy Information Administration’s (EIA) weekly inventories report. This draw was significantly higher than the estimated (Bloomberg Consensus) 2.5mmbbl draw pushing WTI crude price higher to US$88.6/bbl yesterday. Gasoline stocks rose by 0.8mmbbl w-w to 215mmbbl on 1.2% w-w rise in imports. Also, distillate stocks rose by 1.1mmbbl w-w to 161mmbbl/d, on 2.7% w-w rise in imports. However, gasoline and distillate demand rose by 1.9% and 2.9% w-w, respectively, pushing total product demand higher by 1.0% w-w to 20.2mmbbl/d. Capacity utilisation at domestic refineries now stands at 88% in the US. Open interest for WTI futures fell by 1.9% w-w in the week ending 10 December. Also, Brent futures open interest fell by 1.5% w-w. Open interest for WTI and Brent now stands at 1.36mn and 0.85mn, respectively. WTI open interest is now 3.5% lower than the November average of 1.41mn, whereas Brent open interest is now 0.3% lower than the November average of 0.86mn. The aggregate open interest for WTI and Brent futures is now at 2.21mn, down 1.7% w-w. Any authors named on this report are research analysts unless otherwise indicated. See the important disclosures and analyst certifications on pages 17 to 20.Nomura 1 16 December 2010
  2. 2. Oil & Gas/Chemicals | Global Michael Lo, CFA / Cheng KhooExhibit 1. Price summaryCommodity Units Price YTD Average Daily Change %age Weekly Change %age Yearly Change %age YTD Change %ageCrude Oil and Products 15-Dec-10WTI $/bbl 88.62 79.0 0.34 0.4% 0.25 0.3% 16.0 22.0% 7.1 8.7%WTI, 48-month $/bbl 90.03 87.8 0.70 0.8% 1.15 1.3% 3.5 4.1% -1.8 -2.0%Brent $/bbl 91.38 79.1 0.46 0.5% 0.47 0.5% 19.5 27.1% 11.3 14.1%Brent, 48-month $/bbl 92.03 88.7 0.72 0.8% 0.79 0.9% 4.8 5.5% 0.0 0.0%Oman $/bbl 89.35 77.9 0.03 0.5% 0.92 1.0% 16.0 21.9% 10.2 12.8%Dubai $/bbl 89.00 77.6 -0.07 -0.1% 0.82 0.9% 10.6 13.5% 10.9 13.9%OPEC Basket $/bbl 88.21 76.8 0.25 0.3% 0.34 0.4% 17.4 24.5% 10.0 12.8%RBOB c/g 230.92 211.3 1.28 0.6% -3.13 -1.3% 46.4 25.2% 20.9 9.9%Heating Oil c/g 248.35 213.1 1.56 0.6% 1.67 0.7% 58.0 30.5% 29.6 13.5%ICE Gasoil $/ton 768.25 669.5 3.00 0.4% 11.00 1.5% 180.0 30.6% 114.5 17.5%Source: BloombergExhibit 2. IEA estimates for 2010 Exhibit 3. IEA estimates for 2011 (y-y (y-y (y-y (y-y mb/d) mb/d) mb/d) mb/d) World oil demand grow th (LHS) 2.0 World oil demand grow th (LHS) 2.0 2.8 2.0 Non-OPEC supply grow th (RHS) Non-OPEC supply grow th (RHS) 2.4 1.6 1.6 1.6 2.0 1.6 1.2 1.2 1.2 1.2 0.8 0.8 0.8 0.8 0.4 0.4 0.4 0.4 0.0 0.0 0.0 0.0 Jul-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 May-10 Jun-10 Jul-10 Oct-10 Nov-10 Dec-10 Jul-10 Oct-10 Nov-10 Dec-10 Sep-09 Sep-10 Sep-10 Aug-09 Apr-10 Aug-10 Aug-10Source: IEA, Nomura research Source: IEA, Nomura research In its latest Oil Market Report released this week, the OPEC has raised its global oil demand growth estimate for 2010 by 0.2mmbbl/d to 1.5mmbbl/d. For 2011, the oil producer group continues to estimate oil demand growth of 1.2mmbbl/d y-y. On non-OPEC supply growth, the OPEC has retained its last month’s estimate of 1.1mmbbl/d for 2010 but raised its estimate by 0.1mmbbl/d to 0.4mmbbl/d for 2011. In its report, OPEC notes that given the existing level of excess inventories, ample spare capacity and idle refinery capacity, the market should have a “robust cushion” against any sudden surge in demand or disruption in supply. The report also pointed out that with forecasts from agencies for 2011 varying in a wide range (both for global oil demand growth and non-OPEC supply growth) it will be challenging to assess the real needs of the market.Exhibit 4. OPEC estimates for 2010 Exhibit 5. OPEC estimates for 2011 (y-y (y-y (y-y (y-y mb/d) mb/d) mb/d) mb/d) World oil demand grow th (LHS) 2.0 2.0 2.0 2.0 World oil demand grow th (LHS) Non-OPEC supply grow th (RHS) Non-OPEC supply grow th (RHS) 1.6 1.6 1.6 1.6 1.2 1.2 1.2 1.2 0.8 0.8 0.8 0.8 0.4 0.4 0.4 0.4 0.0 0.0 0.0 0.0 Jul-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 May-10 Jun-10 Jul-10 Oct-10 Nov-10 Dec-10 Jul-10 Oct-10 Nov-10 Dec-10 Sep-09 Sep-10 Sep-10 Aug-09 Apr-10 Aug-10 Aug-10Source: OPEC, Nomura research Source: OPEC, Nomura researchNomura 2 16 December 2010
  3. 3. Oil & Gas/Chemicals | Global Michael Lo, CFA / Cheng KhooWeekly events summary1. CFTC proposes swap exemptions ‘Bona fide hedging’ may be exempted from clearing requirements.2. OPEC leaves its quota unchanged OPEC members see oil price in the range US$75-90/bbl as comfortable.Key oil market events during the week1. CFTC proposes swap exemptions: The US Commodity Futures Trading Commission (CFTC) proposed exemptions to centrally clearing requirements for derivatives this week, granting exemption to firms in a trade, as long as one of the parties is a non-financial entity. In others words, the exemption stands for those who carry out ‘bona fide hedging’. Also, trading firms which qualify for the hedging exemption must show how they will mitigate counterparty risk by presenting credit support agreements, margin, third-party guarantee or assets. Swaps used for speculating, investing or trading (which are yet to be defined) will not qualify for this exemption. According to Chairman Gary Gensler, the CFTC will decide which contracts fall into the swap category by January 2011. On 16 December 2010, the CFTC will also consider a proposal to address position limits for energy futures and options for the spot month. Also, limits on a company’s position for all months will be looked into. According to Bloomberg, the commission has been facing lobbying pressures from both ‘inside and outside the agency’ for putting off the data of implementation of the position limits. (Source: Bloomberg)Exhibit 6. Notional value of commodity index Exhibit 7. Futures equivalent contracts of commodityinvestments index investments 250 (US$bn) US Markets Non-US Markets 3.0 (mn) WTI Crude Oil Agricultural Commodities 200 2.5 2.0 150 1.5 100 1.0 50 0.5 0 0.0 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 Jul-10 Oct-10 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 Jul-10 Oct-10 Sep-10 Sep-10 Aug-10 Aug-10Source: CFTC, Nomura research Source: CFTC, Nomura research2. OPEC leaves its quota unchanged: In its 158th (extraordinary) meeting in Quito, Ecuador on 11 December, OPEC kept its output quota unchanged at 24.84mmbbl/d. As has been widely expected, OPEC members indicated that they were comfortable with the current oil price level and there was no need to increase production. In fact, members like Ecuador indicated that US$120/bbl is an ‘adequate’ price for oil. Saudi Arabia said it still favoured oil price in the range of US$70-80/bbl but will not increase production till oil prices cross US$100/bbl. Venezuela added that it would like see a ‘fair’ oil price of US$100/bbl. Also, Kuwaiti oil minister Sheikh Ahmad indicated that the group was comfortable in the range of US$75-90/bbl till the end of the year, but ‘anything is possible’ if prices go above US$100/bbl in 2011. (Source: Thomson Reuters)Nomura 3 16 December 2010
  4. 4. Oil & Gas/Chemicals | Global Michael Lo, CFA / Cheng KhooCrude oilExhibit 8. Crude oil runs Global Runs OECD78 mmb/d 42 mmb/d76 4074 3872 3670 3468 32 J F M A M J J A S O N D J F M A M J J A S O N D Prior3 Year Range Prior 3 Year Average 2009 2010 Prior3 Year Range Prior 3 Year Average 2009 2010Source: IEA Source: IEA United States OECD Europe17 mmb/d 15 mmb/d16 141514 1313 121211 11 J F M A M J J A S O N D J F M A M J J A S O N D Prior 5 Year Range Prior 5 Year Average 2009 2010 Prior5 Year Range Prior 5 Year Average 2009 2010Source: DOE Source: IEA China India9.0 mmb/d 3.8 mmb/d8.0 3.47.0 3.06.0 2.65.0 2.2 J F M A M J J A S O N D J F M A M J J A S O N D Prior 5 Year Range Prior 5 Year Average 2009 2010 Prior 5 Year Range Prior 5 Year Average 2009 2010Source: Thomson Reuters Source: Thomson Reuters * excludes new RPL refinery Korea Japan3.0 mmb/d 5.0 mmb/d 4.52.5 4.0 3.52.0 3.01.5 2.5 J F M A M J J A S O N D J F M A M J J A S O N D Prior 5 Year Range Prior 5 Year Average 2009 2010 Prior 5 Year Range Prior 5 Year Average 2009 2010Source: Petronet Source: Petroleum Association of JapanNomura 4 16 December 2010
  5. 5. Oil & Gas/Chemicals | Global Michael Lo, CFA / Cheng KhooExhibit 9. OECD inventories Total OECD Stocks OECD Oil Product Stocks4,400 mmb 1,800 mmb4,300 1,7004,200 1,6004,1004,000 1,500 J F M A M J J A S O N D J F M A M J J A S O N D Prior4 Year Range Prior 4 Year Average 2009 2010 Prior4 Year Range Prior 4 Year Average 2009 2010Source: IEA * includes both crude and products Source: IEAExhibit 10. Crude inventories OECD United States2,400 mmb 400 mmb2,300 3502,200 3002,100 J F M A M J J A S O N D 250 Prior4 Year Range Prior 4 Year Average 2009 2010 J F M A M J J A S O N D Prior 5 Year Range Prior 5 Year Average 2009 2010Source: IEA Source: DOE OECD Europe China580 mmb 230 mmb 220540 210 200500 190460 J F M A M J J A S O N D 180 Prior4 Year Range Prior 4 Year Average 2009 2010 J F M A M J J A S O N D 2010Source: IEA Source: Xinhua News Agency, Thomson Reuters * commercial Korea Japan40 mmb 140 mmb 13030 12020 110 10010 90 0 80 J F M A M J J A S O N D J F M A M J J A S O N D Prior 5 Year Range Prior 5 Year Average 2009 2010 Prior 5 Year Range Prior 5 Year Average 2009 2010Source: Petronet Source: Petroleum Association of JapanNomura 5 16 December 2010
  6. 6. Oil & Gas/Chemicals | Global Michael Lo, CFA / Cheng KhooExhibit 11. OECD imports Total OECD Imports Total OECD Oil Product Imports36 mmb/d 10 mmb/d 934 832 730 628 5 J F M A M J J A S O N D J F M A M J J A S O N D Prior 5 Year Range Prior 5 Year Average 2009 2010 Prior 5 Year Range Prior 5 Year Average 2009 2010Source: IEA Source: IEAExhibit 12. Crude oil imports OECD United States28 mmb/d 12 mmb/d 1126 1024 922 820 7 J F M A M J J A S O N D J F M A M J J A S O N D Prior 5 Year Range Prior 5 Year Average 2009 2010 Prior 5 Year Range Prior 5 Year Average 2009 2010Source: IEA Source: DOE OECD Europe China11 mmb/d 6.0 mmb/d 5.010 4.0 3.0 9 2.0 1.0 8 J F M A M J J A S O N D J F M A M J J A S O N D Prior 5 Year Range Prior 5 Year Average 2009 2010 Prior 5 Year Range Prior 5 Year Average 2009 2010Source: IEA Source: Thomson Reuters Korea Japan3.5 mmb/d 5.5 mmb/d 5.03.0 4.52.5 4.02.0 3.51.5 3.0 J F M A M J J A S O N D J F M A M J J A S O N D Prior 5 Year Range Prior 5 Year Average 2009 2010 Prior 4 Year Range Prior 4 Year Average 2009 2010Source: Petronet Source: METI, Thomson ReutersNomura 6 16 December 2010
  7. 7. Oil & Gas/Chemicals | Global Michael Lo, CFA / Cheng KhooTotal productsExhibit 13. Total product demand OECD United States53 mmb/d 23 mmb/d 2251 2149 2047 1945 1843 17 J F M A M J J A S O N D J F M A M J J A S O N D Prior5 Year Range Prior 5 Year Average 2009 2010 Prior 5 Year Range Prior 5 Year Average 2009 2010Source: IEA Source: DOE OECD Europe India17 mmb/d 15 mn Tonnes 1316 1115 914 713 5 J F M A M J J A S O N D J F M A M J J A S O N D Prior5 Year Range Prior 5 Year Average 2009 2010 Prior 5 Year Range Prior 5 Year Average 2009 2010Source: IEA Source: Thomson Reuters Korea Japan 2.7 mmb/d 6 mmb/d 2.5 5 2.3 2.1 4 1.9 3 1.7 1.5 2 J F M A M J J A S O N D J F M A M J J A S O N D Prior 5 Year Range Prior 5 Year Average 2009 2010 Prior 4 Year Range Prior 4 Year Average 2009 2010Source: Petronet Source: METI, Thomson ReutersNomura 7 16 December 2010
  8. 8. Oil & Gas/Chemicals | Global Michael Lo, CFA / Cheng KhooGasolineExhibit 14. Gasoline demand OECD United States17 mmb/d 10.0 mmb/d16 9.515 9.014 8.513 8.0 J F M A M J J A S O N D J F M A M J J A S O N D Prior5 Year Range Prior 5 Year Average 2009 2010 Prior 5 Year Range Prior 5 Year Average 2009 2010Source: IEA Source: DOE OECD Europe China3.2 mmb/d 1.9 mmb/d3.0 1.72.8 1.52.62.4 1.32.2 1.12.01.8 0.9 J F M A M J J A S O N D J F M A M J J A S O N D Prior5 Year Range Prior 5 Year Average 2009 2010 Prior 5 Year Range Prior 5 Year Average 2009 2010Source: IEA Source: Thomson Reuters *Implied Demand Korea Japan0.22 mmb/d 1.4 mmb/d0.20 1.20.180.16 1.00.140.12 0.8 J F M A M J J A S O N D J F M A M J J A S O N D Prior 5 Year Range Prior 5 Year Average 2009 2010 Prior 4 Year Range Prior 4 Year Average 2009 2010Source: Petronet Source: METI, Thomson Reuters India0.40 mmb/d0.350.300.250.200.15 J F M A M J J A S O N D Prior 5 Year Range Prior 5 Year Average 2009 2010Source: Thomson ReutersNomura 8 16 December 2010
  9. 9. Oil & Gas/Chemicals | Global Michael Lo, CFA / Cheng KhooExhibit 15. Gasoline inventories OECD United States450 mmb 250 mmb420 230390 210360 190330300 170 J F M A M J J A S O N D J F M A M J J A S O N D Prior3 Year Range Prior 3 Year Average 2009 2010 Prior 5 Year Range Prior 5 Year Average 2009 2010Source: IEA *Industrial stocks Source: DOE OECD Europe China130 mmb 65 mmb 60120 55110 50100 45 90 40 J F M A M J J A S O N D J F M A M J J A S O N D Prior4 Year Range Prior 4 Year Average 2009 2010 2010Source: IEA * Industrial stocks Source: China OGP, Xinhua News Agency * Commercial Korea Japan5.0 mmb 17 mmb 16 154.0 14 133.0 12 112.0 10 J F M A M J J A S O N D J F M A M J J A S O N D Prior 5 Year Range Prior 5 Year Average 2009 2010 Prior 5 Year Range Prior 5 Year Average 2009 2010Source: Petronet Source: Petroleum Association of Japan Singapore13 mmb11 9 7 5 J F M A M J J A S O N D Prior 5 Year Range Prior 5 Year Average 2009 2010Source: Thomson ReutersNomura 9 16 December 2010
  10. 10. Oil & Gas/Chemicals | Global Michael Lo, CFA / Cheng KhooDistillatesExhibit 16. Distillate demand OECD United States16 mmb/d 5.0 mmb/d 4.514 4.0 3.512 3.010 2.5 J F M A M J J A S O N D J F M A M J J A S O N D Prior5 Year Range Prior 5 Year Average 2009 2010 Prior 5 Year Range Prior 5 Year Average 2009 2010Source: IEA Source: DOE OECD Europe China7.0 mmb/d 3.6 mmb/d6.6 3.26.2 2.85.8 2.45.4 2.05.0 J F M A M J J A S O N D 1.6 Prior 5 Year Range Prior 5 Year Average 2009 2010 J F M A M J J A S O N D Prior 5 Year Range Prior 5 Year Average 2009 2010Source: IEA Source: Thomson Reuters *Implied Demand Korea Japan0.50 mmb/d 0.8 mmb/d 0.70.40 0.60.30 0.50.20 0.4 J F M A M J J A S O N D J F M A M J J A S O N D Prior 5 Year Range Prior 5 Year Average 2009 2010 Prior 4 Year Range Prior 4 Year Average 2009 2010Source: Petronet Source: METI, Thomson Reuters India1.4 mmb/d1.21.00.80.6 J F M A M J J A S O N D Prior 5 Year Range Prior 5 Year Average 2009 2010Source: Thomson ReutersNomura 10 16 December 2010
  11. 11. Oil & Gas/Chemicals | Global Michael Lo, CFA / Cheng KhooExhibit 17. Distillate inventories OECD United States700 mmb 190 mmb 170600 150 130500 110400 90 J F M A M J J A S O N D J F M A M J J A S O N D Prior4 Year Range Prior 4 Year Average 2009 2010 Prior 5 Year Range Prior 5 Year Average 2009 2010Source: IEA *Industrial stocks Source: DOE OECD Europe China320 mmb 100 mmb290 80260 60230 40200 20 J F M A M J J A S O N D J F M A M J J A S O N D Prior4 Year Range Prior 4 Year Average 2009 2010 2010Source: IEA *Industrial stocks Source: China OGP, Xinhua News Agency * Commercial Korea Japan18 mmb 17 mmb 1515 1312 11 9 9 6 7 J F M A M J J A S O N D J F M A M J J A S O N D Prior 5 Year Range Prior 5 Year Average 2009 2010 Prior 5 Year Range Prior 5 Year Average 2009 2010Source: Petronet Source: Petroleum Association of Japan Singapore18 mmb1410 6 2 J F M A M J J A S O N D Prior 5 Year Range Prior 5 Year Average 2009 2010Source: Thomson ReutersNomura 11 16 December 2010
  12. 12. Oil & Gas/Chemicals | Global Michael Lo, CFA / Cheng KhooExhibit 18. Trading summaryICE Brent Futures Aggregate Open Interest Nymex WTI Futures Aggregate Open Interest contracts contracts1,000,000 1,500,000 900,000 1,400,000 800,000 1,300,000 700,000 1,200,000 600,000 500,000 1,100,000 400,000 1,000,000 May-08 May-09 May-10 May-08 May-09 May-10 Mar-08 Nov-08 Mar-09 Nov-09 Mar-10 Nov-10 Mar-08 Nov-08 Mar-09 Nov-09 Mar-10 Nov-10 Jan-08 Feb-08 Apr-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Dec-08 Jan-09 Feb-09 Apr-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Dec-09 Jan-10 Feb-10 Apr-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Jan-08 Feb-08 Apr-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Dec-08 Jan-09 Feb-09 Apr-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Dec-09 Jan-10 Feb-10 Apr-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10Source: Bloomberg Source: BloombergICE Brent: Price versus Open Interest NYMEX WTI: Price versus Open Interest$/bbl $/bbl100 100 90 90 80 80 70 70 60 60 -6M 0M 6M 12M 18M 24M 30M 36M 42M 48M -5 0 5 10 15 20 25 30 35 40 45 Current Previous Week Previous Year Current Previous W eek Previous YearSource: CFTC, Bloomberg Source: CFTC, BloombergExhibit 19. OPEC crude oil statistics OPEC Crude - Production, Capacity & Quota OPEC Spare Capacity - October 2010 mb/d 4.8 mb/d34.0 3.96 4.031.0 3.2 2.428.0 1.625.0 0.8 0.30 0.37 0.32 0.11 0.20 0.19 0.09 0.20 0.24 0.11 0.0122.0 0.0 Libya Kuwait Qatar Ecuador Angola Algeria Nigeria U.A.E Venezuela Iran Arabia Iraq Saudi Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 OPEC Crude Production Capacity OPEC Crude Production OPEC QuotaSource: IEA Source: IEA, Nomura ResearchExhibit 20. International rotary rig count World Oil Rig Count US Oil Rig Count 1,900 800 50% 1,800 700 1,700 600 1,600 30% 500 1,500 1,400 400 10% 1,300 300 1,200 200-10% 1,100 100 1,000-30% 900 0 J F M A M J J A S O N D J F M A M J J A S O N D 2010 Y-o-Y %age 2009 Y-o-Y %age 2007 2008 2009 2010 Prior 5 Year Range Prior 5 Year Average 2009 2010Source: Baker Hughes, Nomura Research Source: Baker Hughes, Nomura ResearchNomura 12 16 December 2010
  13. 13. Oil & Gas/Chemicals | Global Michael Lo, CFA / Cheng KhooExhibit 21. US Department of Energy’s weekly summary tableData Product 12/10/2010 12/3/2010 W-o-W W-o-W % 12/11/2009 Y-o-Y Y-o-Y % 5 YR AVG ∆ from 5YR AVG % from 5YR AVGStocks Crude Oil 346 356 (9.9) -2.8% 332 13.6 4.1% 320 25.84 8.1%(mmb) Motor Gasoline 215 214 0.8 0.4% 217 -2.4 -1.1% 206 8.43 4.1% Distillate 161 160 1.1 0.7% 164 -3.1 -1.9% 138 23.13 16.7% Diesel (>15 to 500 ppm) 11 11 0.5 5.0% 20 -8.7 -43.0% 32 (20.16) -63.7% Diesel (<15 ppm) 100 97 2.8 2.9% 96 4.1 4.3% 57 42.68 74.4% Heating Oil (>500 ppm) 50 52 (2.3) -4.4% 48 1.5 3.0% 49 0.64 1.3% Kerosene-Type Jet Fuel 44 46 (2.0) -4.3% 41 2.8 6.7% 40 3.68 9.2% Residual Fuel Oil 40 40 (0.4) -0.9% 36 3.3 9.0% 39 0.44 1.1% Crude Oil Runs (kbd) 14974 14903 71 0.5% 13804 1170 8.5% 14872 102 0.7% Capacity Utilization (%) 88.0 87.5 0.5 80.0 8.1 86.4 1.6Weekly Crude Oil 7690 9053 (1363) -15.1% 7772 (82) -1.1% 9177 (1487) -16.2%Imports Motor Gasoline 876 866 10 1.2% 967 (91) -9.4% 995 (119) -12.0%(kbd) Distillate 263 256 7 2.7% 229 34 14.8% 324 (61) -18.8% Diesel (>15 to 500 ppm) 23 16 7 17 6 56 (33) -58.9% Diesel (<15 ppm) 183 167 16 9.6% 131 52 39.7% 124 59 47.3% Heating Oil (>500 ppm) 57 73 (16) -21.9% 81 (24) -29.6% 144 (87) -60.3% Kerosene-Type Jet Fuel 29 130 (101) -77.7% 57 (28) -49.1% 160 (131) -81.9% Residual Fuel Oil 328 437 (109) -24.9% 330 (2) -0.6% 416 (88) -21.1%Demand Motor Gasoline 9.3 9.2 0.2 1.9% 9.0 0.4 4.3% 9.2 0.1 1.2%(mbd) Distillate 3.8 3.7 0.1 2.9% 3.8 (0.0) -0.6% 4.2 (0.5) -10.9% Kerosene-Type Jet Fuel 1.6 1.4 0.3 21.0% 1.7 (0.0) -1.4% 1.6 0.0 1.9% Residual Fuel Oil 0.5 0.7 (0.2) -28.4% 0.4 0.1 12.6% 0.7 (0.2) -32.6% Total Products 20.2 20.0 0.2 1.0% 19.6 0.6 3.2% 20.7 (0.5) -2.3%Source: Energy Information Administration, Nomura ResearchExhibit 22. Weather update and forecast Average Temperature 6-10 Days Forecast Code Colour Shading Forecast A Orange-Red Above Normal B Blue Below Normal N White Neutral * * Numbers indicate %age probability above/below normalSource: National Weather Service, United StatesNomura 13 16 December 2010

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