5

COMMODITIES RESEARCH September 2010
OIL SKETCHES
Sitting on the dock of the bay, wasting time
Costanza Jacazio
+1 212 526 2161
costanza.jacazio@barcap.com
Amrita Sen
+44 (0) 20 3134 2266
amrita.sen@barcap.com
www.barcap.com
Judging from the path of prices alone, one could get the impression the oil markets were still in a
gentle slumber. Only sporadic jolts and the hint of menace such as recurrent fears of a double-dip
recession have interfered with the tranquility, with the monthly value of key benchmarks on track to
average in the mid-70s for the fifth consecutive month. The market may well still transition into the
northern hemisphere winter napping and holding a comfort blanket, although there are enough
positive developments in fundamentals to imply, in our view, that it is more a question of 'when'
rather than 'if' the market wakes up and breaks to the upside. There is a possibility of a more abrupt
move, but it would be due to a faster-than-expected dispersal of persisting macroeconomic
uncertainty, rather than a further strengthening of fundamentals. The recent macro flow offers
some reasons of optimism, with US data pointing to a pick up in growth in Q3 relative to the lows
reached in Q2 and Chinese economic indicators suggesting that the softening patch of growth
associated with restrictive policy measure is perhaps behind us. Should the last of the economic fog
clear, the underlying oil fundamental balance is strong enough, in our view, to facilitate that shift to
a higher trading range above the $80 level. Global oil demand indicators remain robust and the
strength of OECD demand in particular continues to outperform expectations. In the non-OECD,
while fast-growing Asian economies are entering a phase of slower growth, broadly tracking
consensus expectations, China continues to deliver upside demand surprises.
In contrast with this healthy demand picture, non-OPEC supplies are struggling again. The
strong growth momentum of late 09/early 10 is fading and production has already tipped
into sequential declines. The current trajectory suggests that y/y gains will be exhausted by
the end of the year and for 2011 flat to falling production looks the most likely scenario to
us. Against this weakening backdrop, a few brighter spots have emerged. Canada falls in this
category, as highlighted in our focus piece this month. On the one hand, oil rig utilisation in
the Western Sedimentary Basin has now reached unprecedented high levels, significantly
easing the scale of output declines in this geologically mature area. On the other hand,
following the plunge in activity two years ago, oil sands projects are returning to the drawing
board, although with an evident preference for bitumen-only rather than fully integrated
operations. Despite a series of hurdles, the continued development of Canadian oil sands
looks almost inevitable to us. With conventional crude production prospects largely grim
outside OPEC, the oil supply mix in the future will have to include increasing levels of non-
conventional oil to bridge the gap between demand and supply. It is here that Canada’s oil
sands are likely to be the most prominent candidate to rise to this challenge.
PLEASE SEE ANALYST CERTIFICATIONS AND IMPORTANT DISCLOSURES STARTING AFTER PAGE 42
Barclays Capital | Oil Sketches Monthly
TABLE OF CONTENTS
1. FOCUS: CANADA – THE BATTLE FOR THE NEXT ENERGY FRONTIER 3
2. OPEC PRODUCTION ESTIMATES 12
3. MONTHLY AND QUARTERLY DATA RELEASES 15

US crude oil imports ................................................................................................................................15
Russia..........................................................................................................................................................17
United Kingdom........................................................................................................................................18
Mexico ........................................................................................................................................................20
Brazil ............................................................................................................................................................22
India.............................................................................................................................................................23
International rig counts...........................................................................................................................24
Japan............................................................................................................................................................26
Norway .......................................................................................................................................................29
China ...........................................................................................................................................................30
US oil production......................................................................................................................................32
US data revisions ......................................................................................................................................33
4. MARKETS AND PRICES 36
5. MARKET BALANCES AND FORECASTS 38
Sources Data in this report comes from the following sources unless otherwise noted, and from Barclays Capital calculations.
Pages 12 to 14: Energy Information Administration Short Term Energy Outlook, International Energy Agency Oil
Market Report, Middle East Economic Survey, OPEC Monthly Oil Market Report, Reuters, Bloomberg. Pages 15 to 16:
US Energy Information Administration. Pages 18 to 19: UK Department for Business, Enterprise and Regulatory
Reform. Pages 20 to 21: Petroleos Mexicanos Indicadores Petroleros. Pages 24 to 25: Baker-Hughes. Pages 26 to 28:
Ministry of Economy Trade and Industry, Preliminary Report on Petroleum Statistics. Page 29: Norwegian Petroleum
Directorate. Page 30: China Customs. Page 31 to 36: Energy Information Administration Petroleum Supply Monthly.
Page 38 to 42: International Energy Agency Oil Market Report, OPEC Monthly Oil Market Report, Energy Information
Administration Short Term Energy Outlook.
24 September 2010 2
FOCUS
Canada: the battle for the next energy frontier

“Now I can cross the shifting sands” – L. Frank Baum
Energy markets are in a state of flux. The high price of oil, instability in various energy-
producing regions, surging demand in non-OECD countries and reserve depletion in key
non-OPEC producers have made both consuming and producing nations highly sensitive to
developments that could challenge their position on the global energy scene. Therein lies
the importance of the rise of Canada and its oil sands industry in the global energy market.
Canadian oil sands have attracted market attention for a variety of reasons. They have
embodied the industry’s thrust to overcome the impact of a shrinking conventional supply
base. In the context of the oil market, therefore, Canada has often become synonymous
with oil sands, with little, if any, attention placed on other components of the country’s oil
industry. Yet, Canada’s production story is more nuanced than what meets the eye or,
rather, what makes the sound-bites. While oil sands are undeniably the most dynamic
constituent of the production profile, by no means do they convey the picture of Canada’s
oil production in totality. For instance, during the first four months of 2010, the split
between oil sands and conventional output was exactly equal. And while Canadian oil sands
production rose by 30% between Q1 06 and Q1 10, the total increase in the country’s
output was just 6%. Clearly, the trend in conventional output is still a key contributor in
shaping Canada’s overall production profile.
Conventional oil production has been declining steadily since 2003 at a pace close to 2.5%
pa. The bulk of output is produced from the Western Canadian Sedimentary Basin, covering
most of Alberta, British Columbia, Saskatchewan, Manitoba and the Northwest Territories.
Many of these oil fields here have been producing for decades and are now faced with steep
natural decline rates. The rest of Canada’s conventional output originates from three
offshore projects off the Atlantic Coast – Hibernia, Terra Nova and White Rose – with
combined output of 0.27 mb/d in 2009.
Figure 1: Canadian Oil production by type (thousand b/d) Figure 2: Canada conventional oil output by region (kb/d)
1700 Oil sands 1,600 Alberta Saskatchewan Eastern Canada Others
1600 Conventional 1,400
1500 1,200
1400 1,000
1300 800
1200 600
1100 400
200
1000
0
900
1 2 3 4 5 6 7 8 9 10
Apr-06 Apr-07 Apr-08 Apr-09 Apr-10
Source: NEB, Barclays Capital Source: CAPP, Barclays Capital
24 September 2010 3
The collapse in oil prices in the aftermath of the deepening of the financial and economic crisis
two years ago triggered a steep pulled back in drilling and subsequent output contraction. In
2009, conventional Canadian oil production fell by more than 9% as a consequence of the
plunge in drilling activity. As a result, total Canadian liquids output was broadly flat y/y despite
the start up of two major oil sands upgraders. Drilling activity started to fall very sharply in Q4
08 and remained at depressed levels for most of 2009. Yet, 2010 has heralded a rapid recovery
which has gathered momentum with the passing of time. In August, the average rig count
was 140% above the 2009 level and 30% above the 2008 highs. Strong incentives to direct
drilling towards oil rather than gas due to the formidable premium commanded by the former
has been a key driver underpinning this resurgence. Other factors have contributed as well. An
attempt by producers to apply advanced drilling technology originally used and refined in the
development of unconventional gas plays to oil prospects is underway. Moreover, the decision
by Alberta’s Government to amend its royalty framework earlier this year to reverse the rate
hikes implemented in 2009 is also supporting to put more rigs at work. Mirroring the pick up
in drilling, well completions are also rising sharply. For the year through to July, oil well
completions in Alberta – Canada’s largest oil province – are 2.4x higher than the comparable
level for 2009 and at the highest for any such period throughout the decade. Accompanying
the pick up in E&P activity, Alberta has also witnessed a sharp rise in revenues from crown
(government) land sales. For the first eight months of the year, the province has collected
bonuses worth $1.5bn compared to $181mn for the corresponding period in 2009. The rise in
land transactions is partly a direct consequence of the improved fiscal terms of the province
and partly reflects an industry-wide push to seek out unconventional gas and oil resources. In
these circumstances, we would expect the rig count to remain elevated and possibly climb
higher, particularly should gas prices stay – as we expect – at depressed levels.
Figure 3: Canadian oil-directed rig count Figure 4: Alberta wells completions: year through July (kb/d)
350 2007 2008 2009 2010 2000 8000
300 1800 7000
250 1600 6000
200
1400 5000
150
1200 4000
100
1000 3000
50 Oil wells, LHS
800 2000
0 Gas wells, RHS
1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 600 1000
number of week 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Source: Bloomberg, Barclays Capital Source: Government of Alberta, Alberta Energy Resources and Conservation
Board, Barclays Capital
This should then help alleviate the steep declines that have gripped Canada’s conventional
supplies for some time now and, in turn, should become a key contributor in pushing overall
Canadian output higher. The first signs of a production revival are already starting to filter
through the data (see Figure 5). The scale of y/y contraction in conventional oil supplies has
narrowed to 28 thousand b/d in April, marking the smallest decline in 14 months. With the
seasonal-adjusted rig count having climbed even higher since the start of the year, we
believe further incremental gains will emerge as new output data become available.
24 September 2010 4
Production and export data are already turning more constructive. The combined y/y
production increase in April and May was 130 thousand b/d, the largest y/y growth for any
two months since summer 2007. Exports are also gaining momentum, with flows into the
US reaching a record high in June. With narrowing declines in aggregate conventional
output, incremental volumes from oil sands projects are starting to get fully reflected
through tilting Canadian output into positive growth.
Figure 5: Canadian Oil production y/y growth (kb/d) Figure 6: Canadian crude exports to the US (kb/d)
300 350
Oil sands Conventional
250
200
150
100 50
-50
0
-150
-100 -250
-350
-200
-450
-300 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10
Aug-08 Jan-09 Jun-09 Nov-09 Apr-10 Heavy Medium Light Total
Source: NEB, Barclays Capital Source: DOE, Barclays Capital
Oil sands production in Canada has served as a major engine of growth over the past
decade and will continue to do so over the next few years. Production of bitumen and
synthetic oil currently averages around 1.4 mb/d, having risen by 125% over the last
decade. The contribution of oil sands to the country’s oil output has grown from under 30%
since 2000 to 50% today. In light of existing and announced investments (worth over
$50bn) as well as projects under development, the Canadian Association of Petroleum
Producers (CAPP) estimate oil sands output to increase by some 60% to 2.2 mb/d by 2015.
Notwithstanding the widespread enthusiasm among oil participants around Canadian oil
sands, the industry ran into major setbacks during the downturn of late 2008/early 2009.
Several projects were postponed or cancelled as the impediments created by an overheated
sector (huge costs overran due to massive underestimation of infrastructure, material and
manpower constraints) met with the challenges stemming from the sharp fall in oil prices
and restricted access to credit for some companies. As a result, in its mid 2009 update
CAPP cut back its estimates for oil sands production substantially. With the stabilisation of
the oil market over 2009 and 2010, some of the projects have moved back on the drawing
board, and production forecasts have turned more optimistic again. Yet, despite the upward
revision, current production expectations for the medium term are still well below those put
out in mid-2008, reflecting the long lead times involved in the developments of these
projects and the deferred consequences of any investment decision made today (see box 2
for more details).
Overall, we anticipate oil sands production to continue to grow steadily, with an extra 150-
200 thousand b/d pa of new capacity expected to come on stream in 2011 and 2012.
Incremental volumes in 2010 are dominated by the continued ramp up at CRNL Horizon
Phase 1 (135 thousand b/d) and Nexen Long Lake Phase 1 (72 thousand b/d) integrated
projects as well as Foster Creek and Christina Lake bitumen operations. Moving into 2011
and 2012, a major expansion at Athabasca oil sands mining project and the start up of
Suncor Firebag – stage 3 should provide further momentum to growth (see Figure 7).
24 September 2010 5
Figure 7: Details of Canadian oil sands projects

Year Projects Capacity (000 b/d) Type
2008/2009 CNRL Horizon 135 Integrated
Nexen Long Lake 72 Integrated
Suncor Millenium Debottlencking 23 Mining
Christina Lake Phase 1B 10 In-situ
Foster Creek 1D/E 60 In-situ
MEG Christina Lake 22 In-situ
CNRIL Primose East 32 In-situ
2010 Connacher Great Divide 10 In-situ
Statoil Leismer Demo 10 In-situ
AOSP Phase 2 (Shell Jackpine) 100 Mining
2011 Suncor Firebag 68 In-situ
AOSP Scotford 1 90 Upgrader
Christina Lake Phase 1C 40 In-situ
Devon Jackfish 2 35 In-situ
2012 Suncor North Steepbank Extension 180 Mining
Kearl Lake Phase 1 110 Mining
Source: Company data, Barclays Capital
Within the above, the bulk of the growth is materialising from bitumen rather than syncrude
production and this trend is set to continue, in our view. In a sharp reversal of the prevailing
industry practice earlier this decade, full integrated-projects are no longer dominating the scene.
Costs play an important part in this dynamic. A fully-integrated project includes either the use of
an upgrader (essentially the front end of a refinery), which is not part of a conventional upstream
operation, or the vertical integration of the upstream operation with a refinery to directly process
the bitumen into finished products. Clearly, the costs involved are significantly higher that a
bitumen-only extraction facility. Not surprisingly, when the credit crisis unfolded a vast number
of upgrading projects were put on hold, in an effort to cut capex.
Figure 8: Details of cancelled/delayed projects, thousand b/d
Project names Status Capacity Initial start-up

Voyageur Expansion Halted 200 2012
Edmonton Upgrader Cancelled 200 2015
Heatland upgrader Phase 1 Halted 78 2008
Fort Hills Upgrader Delayed 140 2012
Firebag Stage 3 Delayed 62.5 2008
Creek Thermal Oil Sands Delayed 120 2010
Algar Oil Sands Project Halted 10 2009
Upgrader Projects Status Bitumen SCO
Voyageur upgrader On hold 234 190
Shell Scotford upgrader 2 On hold 400 391
Fort Hills Sturgeon On hold 340 290
BA Energy Heartland On hold 163 139
North West Upgrading Sturgeon On hold 150 195
OPTI/Nexen Long Lake On hold 72 59
Value Creation Terre de Grace On hold 10 8
Source: Company data, Barclays Capital
24 September 2010 6
However, when market conditions started to improve and E&P activity revived, companies
opted to proceed with bitumen operations only, as the economics of building an upgrader
are no longer viable owing to the dramatic contraction in light-heavy spreads (see Figure
10). The consensus view across the industry is that this status quo is likely to persist for a
while, as a result of which, despite the recent pick up in oil-sands activity, there is only one
upgrader planned to come on line in upcoming years (AOSP’s Scotford Upgrader). Given
this, the growth in heavy crude oil streams is likely to outpace that of syncrude over the
next few years and, in a similar vein, incremental heavy crude oil volumes from Canada into
the US should outstrip those of light grades. Of course, in short periods of time, this trend
might be blurred by the fluctuations in syncrude output depending on the smooth
functioning of the upgraders, Thus, overall bitumen-only projects and heavy streams are
likely to be the mainstay of Canadian oil sands for the next few years.
Figure 9: Alberta oil sands production by type (mb/d) Figure 10: Light-heavy differential (WTI-WCS, first month)
0.9 Bitumen Syncrude 50

0.9 $/bbl
0.8 40
0.8
30
0.7
0.7 20
0.6
0.6 10
0.5
0
0.5
0.4
-10
Mar-06 Mar-07 Mar-08 Mar-09 Mar-10
Sep-06 Sep-07 Sep-08 Sep-09 Sep-10
Source: NEB, Barclays Capital Source: Mimic, Barclays Capital
Further ahead, Canadian oil sands will play an increasingly important role in the domestic and
international market alike. The revival in drilling across the Western Sedimentary Basin is likely
to mitigate the pace of decline in the short term, adding further impetus to the rise in
Canadian oil output. However, in the longer term, the full potential in the Western Sedimentary
Basin seems to have been largely exhausted and production is set to remain on a declining
trend, in our view. By contrast, the growth potential associated with the development of
Canadian oil sands remains huge, thereby not only helping to offset the declines in
conventional liquid output, but also propels Canada into an ever more important non-OPEC
supplier of oil. Having witnessed significant technical and economic barriers in their
commercialisation, Canadian oil sands started to be developed rapidly over the past decade,
with output doubling between the late 1990s and today. The rise in oil prices from 2002 to
2008, technology improvements and a stable operating environment spurred an investment
surge, resulting in strong output growth. Production from Alberta oil sands operations
currently stand at 1.4 mb/d, comparable to the oil supply from Algeria. Putting this growth in
perspective, the increase in Canadian oil sands production since 2000 would parallel some of
the strongest supply expansions in the world (the fifth strongest to be precise).
Canada alone has, by some estimates (ERCB), 175 bn barrels of bitumen reserves that can
be processed with today’s technology, making it second only to Saudi Arabia in proven oil
reserves in the world. While the exact figure remains a subject of debate, the key point is
that, outside OPEC, Canada remains a country with an unparalleled reserve base. The size of
24 September 2010 7
the oil sands resource, along with a production profile notable for a long and stable
production plateau, means that the oil sands could play an increasingly important role in
satisfying the world’s demand for energy. However, although the pace of oil sands
expansion has been rapid in recent years, the future rate of growth is far from certain due to
financial, economic, environmental, engineering and technological challenges.
Figure 11: Growth in oil production in non-OPEC countries Figure 12: Canadian oil production, actual and forecasts
3.5 Production growth, mb/d 2.3 Conventional

2.1 Oil-sands Forecasts
3.0
2.5 1.9
mb/d
2.0 1.7
1.5 1.5
1.0 1.3
0.5 1.1
0.0 0.9
Canada*
Azerbaijan
Kazhakstan
Sudan
Thailand
Russia
Guinea
Brazil
0.7
0.5
2001 2003 2005 2007 2009 2011 2013 2015
Note: Canada’s growth refers to oil sands only. Source: CAPP, Barclays Capital
Source: BP statistical review, Barclays Capital
Oil sands are not cheap to develop and produce. Indeed, high costs were the reason that it
took the better part of a century for commercial production to commence. Though costs
have come off significantly, the oil price needed to justify investment ranges from around
$60/bbl to $85/bbl or higher. There are also environmental costs. With current technology
the amount of carbon dioxide (CO2) emitted during the production process places oil sands
among the more carbon-intensive forms of liquid fuels. Water consumption and
management as well as land use and reclamation are also of concern, while cost overruns
have continued to haunt the industry as a whole. These issues are in the realm of
environmental regulation, technology, oil market trends, industry costs, and US-Canada
relations. For instance, with the US in the process of diversifying its crude import base away
from the Middle East, a vast and politically stable resource base in its neighbour’s backyard
would only have been too perfect a solution for US’s qualms. According to a study by IHS
CERA released this week, greenhouse gas emissions from Canadian oil sands products
imported to the US are about 6% higher than the average crude consumed in the country,
thereby continually stoking the debate about the future of Canadian oil sands exports to the
US. Many of these issues do not lend themselves to clear-cut sound bites or headlines. The
complexity and dynamic nature of the factors that shape the oil sands industry make easy
answers elusive. Yet, the success of Canada’s oil sands is almost inevitable. With
conventional crude production prospects largely grim outside OPEC, the oil supply mix in
the future will have to include increasing levels of non-conventional oil to bridge the gap
between demand and supply. Moreover, the vast amount of R&D and investments that have
already gone into the industry to bring Canadian oil sands to a commercially viable state is
immense. While there have been some project setbacks due to the recession, we would
expect Canadian oil sands production to increase substantially in the future. With Canadian
conventional crude oil output declines also showing signs of stabilisation at worst and
improvement at best, the contribution of Canada’s oil to the world of oil supplies is set to
increase in the coming years, with the US likely to remain the primary beneficiary. Increased
24 September 2010 8
pipeline flows from Canada, in turn, have its implications for key North American
benchmarks, with heightened sensitivity to local and specific intra-regional factors resulting
in dislocations, already at play, intensifying.
Box 1: The what, where and how of oil sands

WHAT: Oil sands, often used interchangeably with tar sands, are effectively grains of sand
covered with water, bitumen, and clay. The “oil” in the oil sands comes from bitumen, an
extra-heavy oil with high viscosity. The bitumen content of the oil sands ranges from about 1
to 18%. The rest is mainly sand and water. Oil sands producers separate the bitumen from the
sand and water in order to derive the feedstock from which marketable oil is manufactured.
WHERE: Canada’s oil sands are concentrated in three major deposits. The largest is
Athabasca, a large region around Fort McMurray in northeastern Alberta. These deposits
are one of largest oil sands deposits in the world. The other two areas are Peace River in
northwest Alberta and Cold Lake, east of Edmonton. There are also oil sands deposits in
Saskatchewan, but their commercial viability is yet to be established. Outside of Canada,
bitumen or extra-heavy oil deposits are found in many places around the world, but the only
other large-scale development is in Venezuela.
HOW: Oil sands are unique in that they are produced via both surface mining and in-situ
thermal processes. There are two methods currently used to extract bitumen from the
ground: open-pit mining and in situ. Open-pit mining resembles conventional mining
techniques and is effective in extracting oil sands deposits near the surface. The minable
portion of the oil sands is located north of Fort McMurray in Canada, and spreads over
some 200 square miles. It generally takes about two metric tons of mined oil sands material
to produce a barrel of synthetic crude oil. However, the bulk (80%) of Canada’s estimated
oil sands deposits are too deep below the surface to use open-pit mining. The second
method, in situ, can reach these deeper deposits. In situ extraction involves the use of steam
to heat and separate bitumen from the surrounding sands, and allowing it to flow to the
surface. The bitumen is then pumped from these pools using horizontal drain wells. Until
date, two thermal processes are in use: steam-assisted gravity drainage (SAGD) pioneered
by Suncor in 2004 and cyclic steam stimulation (CSS), though various more are being
researched and developed. CSS is primarily used in the Cold Lake and Peace River areas,
whereas SAGD predominates in the Athabasca region, with the latter accounting for the
larger share of oil shares production lately, and is expected to do so in the future too. So far,
Canadian oil sands producers have employed each method almost equally, but future
production will likely shift to emphasise in situ extraction.
Once extracted, oil sands producers need to add lighter hydrocarbons to the bitumen to
allow it to flow through pipelines. Upgraders then process some of the bitumen into
synthetic crude, a relatively light, sweet form of crude oil that can be sold to a traditional oil
refinery. Some of the bitumen is also sold in raw form as dilbit (diluted bitumen) and synbit
(synthetic bitumen), marketed to specialised refineries with deep conversion capacity. Some
oil sands projects have integrated upgrading capacity, while others send their raw bitumen
production to another facility.
24 September 2010 9
Figure 13: Hydrocarbon resources in Alberta, Canada
Source: Government of Alberta, Barclays Capital
Box 2: Challenges of the oil sands industry

Natural gas remains a key input in the oil sands production chain. According to our equity
analysts, some 0.4-0.5 mcf of natural gas is required for one barrel of synthetic oil in the
open-mining operation, 1 mcf of gas for one barrel of synthetic oil in the SAGD process, and
1.25 mcf/d for a CSS operation While the fall in natural gas prices and oversupply in the
market has come as a respite to oil sands producers, there are various other factors that
remain a challenge for the industry.
There is a significant dependence on water used for separation of oil from the sand. To
produce a barrel of bitumen or synthetic oil requires some 10 barrels of water for mining
operations and three barrels of water for in situ operations, according to the Alberta Energy
Research Institute. Although most of the water is recycled, there is still about 20% of
potable make-up water that is required, and this creates concerns over the need for
conservation and sustainability.
The amount of energy required to produce a barrel of synthetic crude oil is about a third of
the energy in a barrel of bitumen. This makes oil sands operations a large source of
greenhouse gas emissions. The need to reduce CO2 emissions, as concern about climate
change grows and reduction targets come into effect add considerable additional risks to oil
24 September 2010 10
sands investments. Moreover, bitumen’s high sulphur content which requires the removal
and storage of sulphur can potentially become a major environmental issue too.
The investment costs and time to bring typical oil sands projects into production is also a
major risk. Typical mining, extraction and upgrading projects require at least $5bn
investment to produce 100 thousand b/d of quality refinery ready synthetic crude oil,
though of course this varies depending on the size of the project. The operating cost varies
significantly and remains at the high end compared to conventional crude oil operations. Of
course, with natural gas prices having come down, costs have reduced, but given that the
price received per barrel of bitumen is also considerably lower, the overall revenue stream
requires a high oil price. The time to bring mining projects into production is approximately
six years, including engineering feasibility, regulatory approval, equipment purchases,
construction and start up. In situ operations have the advantage that they can be designed
to come on stream in modular fashion; however, the per barrel supply costs are similar to
that of surface mined operations. Our equity colleagues estimate that though the industry’s
development costs may have declined by 20-30% since they peaked July 2008, the industry
will still need an average oil price of $84/bbl to generate a full cycle IRR of 12% for the fully
integrated new oil sands developments. Of course, the cost for bitumen only projects lies
significantly lower at around $60/bbl.
OPEC PRODUCTION ESTIMATES
OPEC output
The average of our sample of third party estimates of OPEC Figure 14: y/y change in OPEC crude oil production
output in August is 29.15 mb/d, a m/m decline of 56 thousand
b/d. Since the beginning of the year, OPEC production has 2
remained remarkably stable, with the average of our third party
estimate in August, in fact, lower by 0.04 mb/d compared to the 1
start of the year. The divergences across the estimates remain
0
vast, with Reuters estimating a decline of 140 thousand b/d
while the EIA pegged the rise at just 10 thousand b/d. On
-1
average, Nigeria (down by 34 thousand b/d), Iraq (down by 33
thousand b/d) and UAE (down by 21 thousand b/d) witnessed
-2
the largest declines, while Angola saw a rise of 37 thousand b/d.
In our view the call on OPEC crude is set to rise significantly in -3
H2 10, as demand recovers and non-OPEC supply falls back.
This should warrant a continued tightening in the oil physical -4
balance even if OPEC production nudges higher to 06 07 08 09 10 11
accommodate that.
Figure 15: Estimates of OPEC production, August 2010, mb/d

EIA EIG IEA MEES OPEC Platt's Reuters Bloomberg Average
Algeria 1.35 1.22 1.26 1.26 1.27 1.26 1.25 1.25 1.26
Angola 1.85 1.77 1.79 1.79 1.82 1.79 1.80 1.84 1.80
Ecuador 0.46 0.47 0.46 0.48 0.46 0.47 0.47 0.47 0.47
Iran 3.80 3.49 3.70 3.70 3.68 3.70 3.61 3.75 3.68
Iraq 2.30 2.27 2.32 2.39 2.35 2.32 2.26 2.35 2.32
Kuw ait 2.30 2.39 2.30 2.30 2.31 2.30 2.30 2.30 2.31
Libya 1.65 1.54 1.56 1.55 1.59 1.57 1.57 1.56 1.57
Nigeria 2.01 1.84 2.14 2.25 2.01 2.10 2.12 2.00 2.07
Qatar 0.85 0.79 0.79 0.80 0.82 0.81 0.82 0.83 0.81
Saudi Arabia 8.50 8.21 8.28 8.23 8.23 8.28 8.30 8.29 8.30
UAE 2.30 2.40 2.32 2.30 2.31 2.28 2.29 2.32 2.32
Venezuela 2.10 2.48 2.23 2.22 2.31 2.23 2.30 2.20 2.25
OPEC 29.47 28.84 29.15 29.27 29.15 29.11 29.09 29.15 29.15
OPEC 11 27.17 26.57 26.83 26.88 26.80 26.79 26.83 26.81 26.84
Note: The estimates published by the OPEC Secretariat as shown above are the averages of third party sources. They are not included in the average of the other
sources shown in the above and below tables.
Figure 16: Estimates of change in production over previous month, thousand b/d
EIA EIG IEA MEES OPEC Platt's Reuters Bloomberg Average
Algeria 0 5 0 0 -2 0 -10 -10 -2
Angola -30 36 50 50 63 40 100 15 37
Ecuador -10 -2 0 10 -1 0 0 -10 -2
Iran 0 -15 20 -50 -15 -10 -10 20 -6
Iraq 0 -41 -60 37 -6 -80 -20 -70 -33
Kuw ait 0 -25 0 0 -12 0 0 -10 -5
Libya 0 15 0 0 9 0 0 10 4
Nigeria 50 -29 -20 -30 -98 -20 -160 -30 -34
Qatar 0 20 -10 0 7 -10 0 5 1
Saudi Arabia 0 25 0 10 15 0 0 -10 4
UAE 0 -25 -40 -20 -21 -30 -40 10 -21
Venezuela 0 11 0 0 19 0 0 5 2
OPEC 10 -25 -60 7 -42 -110 -140 -75 -56
OPEC 11 10 16 0 -30 -36 -30 -120 -5 -23
Range and average of OPEC output estimates
Figure 17: Estimates of Saudi Arabian output (mb/d) Figure 18: Estimates of Iranian output (mb/d)
10.0 4.4
9.6
4.2
9.2
8.8 3.9
8.4
3.7
8.0
7.6 3.4
06 07 08 09 10 11 06 07 08 09 10 11
Figure 19: Estimates of Venezuelan output (m/d) Figure 20: Estimates of UAE output (mb/d)
2.7 2.7
2.6 2.6
2.5
2.5
2.4
2.4
2.3
2.3
2.2
2.1 2.2
2.0 2.1
06 07 08 09 10 11 06 07 08 09 10 11
Figure 21: Estimates of Kuwaiti output (mb/d) Figure 22: Estimates of Nigerian output (mb/d)
2.7 2.5
2.6
2.3
2.5
2.1
2.4
1.9
2.3
1.7
2.2
2.1 1.5
06 07 08 09 10 11 06 07 08 09 10 11
Range and average of OPEC output estimates
Figure 23: Estimates of Libyan output (mb/d) Figure 24: Estimates of Algerian output (mb/d)
1.80 1.45
1.75
1.40
1.70
1.65 1.35
1.60
1.30
1.55
1.25
1.50
1.45 1.20
06 07 08 09 10 11 06 07 08 09 10 11
Figure 25: Estimates of Iraqi output (m/d) Figure 26: Estimates of Qatari output (mb/d)
2.60 0.88
2.40
0.84
2.20
0.80
2.00
0.76
1.80
0.72
1.60
1.40 0.68
06 07 08 09 10 11 06 07 08 09 10 11
Figure 27: EIA estimates of Angolan output (mb/d) Figure 28: EIA estimates of Ecuadorian output (mb/d)
2.2 0.56
0.54
2.0
0.52
1.8
0.50
1.6
0.48
1.4 0.46
1.2 0.44
06 07 08 09 10 11 06 07 08 09 10 11
MONTHLY DATA SOURCES
US crude oil imports

US crude oil imports continued to grind higher in June, reaching Figure 29: Source of crude oil imports (thousand b/d)
9.83 mb/d, representing a m/m increase of 0.23 mb/ and a y/y change from 2010 ch from
increase of 0.78 mb/d. In June, year-to-date import volumes Jun 10 May 10 Jun 09 to date 2009
Canada 2174 177 182 1976 96
outstripped those for the corresponding period in 2009 for the Saudi Arabia 1111 18 213 1063 12
first time this year. On a country standpoint, the uptick was Mexico 1066 -224 -20 1093 -63
Nigeria 1064 60 298 999 366
driven by Canada and Iraq, which together saw their crude flows Venezuela 850 -160 -257 935 -96
into the US rising by 454 thousand b/d m/m. On the negative Iraq 614 227 241 499 44
Angola 425 2 8 410 -116
side, Mexico and Venezuelan imports fell sharply (-384 thousand Russia 416 57 111 277 6
b/d combined), causing a contraction in the availability of heavy Colombia 387 93 108 320 66
Algeria 375 23 143 318 73
grades (down 282 thousand b/d). Indeed, the overall rise in Brazil 307 -5 42 279 -55
imports was dominated by incremental volumes of light grades, Kuwait 212 -3 51 202 35
Ecuador 211 51 70 182 -30
which were up 304 thousand b/d on the month. For the year-to- United Kingdom 117 50 -32 104 -25
date as well higher light crude imports are driving the overall Azerbaijian 90 23 -9 58 -5
Libya 70 46 -1 42 -26
increase, with light flows up by almost 400 thousand b/d y/y in Trinidad & Tobago 52 25 52 48 8
H110. Congo (Brazaville) 34 -55 15 81 39
Argentina 34 34 -23 17 -52
Equatorial Guinea 33 -44 -18 54 -31
Figure 30: Source of crude oil imports, June 2010 Others 199 -164 -391 349 -199
Total 9842 231 783 9307 48
of which
Canada OPEC 4933 254 691 4693 247
22% non-OPEC 4910 -23 92 4614 -199
Others heavy crude 3771 -293 53 3715 -101

medium crude 3829 228 348 3411 -246
35% light crude 2251 304 390 2182 396
NAFTA 3240 -47 162 3069 33
South America 1865 32 3 1815 -155
Saudi Africa 2057 -44 299 2045 238
Arabia Asia-Pacific 86 3 -4 80 -28
13% FSU 529 72 125 354 15
Middle East 1937 232 338 1806 12
Europe 128 -17 -140 138 -67
Venezuela Mexico
8% Nigeria 11%
11%
Figure 31: Imports and 12-month average (mb/d) Figure 32: y/y change in crude imports (thousand b/d)
11.0 1,500
10.5 1,000
10.0 500
9.5 0
9.0 -500
8.5 -1,000
8.0 -1,500
7.5 -2,000
98 99 00 01 02 03 04 05 06 07 08 09 10 03 04 05 06 07 08 09 10
US crude oil imports
Figure 33: Crude imports by type, June 2010 Figure 34: US imports by region, June 2010
Europe
1%
Middle East
Light 22%
NAFTA
22%
Heavy 33%
37%
FSU
5%
Asia-Pacific
1%
Medium Africa
South
41% 20%
America
18%
Figure 35: Source of heavy crude oil imports into US, June Figure 36: Source of heavy crude used in Gulf Coast
2010 refineries, June 2010
Others
Others
12% Canada 9%
Colombia Canada 6%
6% 31%
Mexico
Brazil Brazil 36%
7% 6%
Colombia
10%
Venezuela
22%
Mexico Venezuela
22% 33%
Figure 37: Source of medium imports, June 2010 Figure 38: Source of light imports, June 2010
Others
19% Saudi Others Nigeria
Arabia 27% 31%
30%
Angola
8%
Saudi
Arabia
Nigeria 5%
9%
Mexico
9% Algeria
Canada
Iraq Canada 17%
19%
15% 11%
Russia
Russian oil output fell back to 10.06 mb/d in August from a Figure 39: Oil production (mb/d)
one-year peak of 10.14 mb/d in July, constituting the lowest
Lukoil Rosneft TNK-BP Other Total
volumes since January 2010. The sequential decline 2007 1.84 2.04 1.39 4.60 9.87
compounded by less favourable base effects brought the y/y 2008 1.81 2.28 1.38 4.32 9.78
increase to just 90 thousand b/d from 280 thousand b/d for 09Q2 1.86 2.28 1.41 4.32 9.87
09Q3 1.86 2.37 1.43 4.32 9.97
the period January-July. While crude output in August was 09Q4 1.83 2.35 1.43 4.46 10.07
affected by the maintenance of Sakhalin 1 which was shut 2009 1.85 2.31 1.41 4.34 9.92
for most of August, the effects of the ramp-up of Vankor and Feb 1.84 2.22 1.42 4.60 10.08
Mar 1.83 2.24 1.43 4.63 10.13
Uvat are gradually stabilising. We expect Russian output to 10Q1 1.84 2.30 1.42 4.52 10.08
remain flat to falling through the remainder of the year Apr 1.82 2.25 1.44 4.57 10.08
before moving back onto a more sustained downward trend May 1.82 2.25 1.45 4.61 10.13
Jun 1.83 2.26 1.46 4.58 10.13
in 2011. Exports of Russian crude to countries outside the 10Q2 1.82 2.25 1.45 4.59 10.11
CIS rose by 4.1% y/y in August, while exports to the CIS Jul 1.82 2.27 1.46 4.59 10.14
dropped 27%, with crude to Belarus down some 50% after Aug 1.81 2.27 1.46 4.52 10.06
y/y change -0.05 -0.12 0.03 0.23 0.09
Russia imposed full duty for exports bound for that country. 2010 to date 1.83 2.27 1.44 4.56 10.10
y/y change -0.04 -0.02 0.04 0.26 0.25
Figure 40: y/y change in oil output (thousand b/d) Figure 41: Differentials to Brent, $/bbl
450 0
-1
350
-2
250
-3
150 -4
-5
50
-6
-50 MED
-7
-150 -8
06 07 08 09 10 11 01 02 04 06 07 09 11
Figure 42: Crude oil exports (mb/d) Figure 43: Monthly value of crude oil exports ($, billion)
5.4 18
5.2 16
5.0 14
4.8 12
4.6 10
4.4 8
4.2 6
4.0 4
06 07 08 09 10 11 06 07 08 09 10 11
United Kingdom
The decline in UK total oil liquids output was severe in June, Figure 44: UK oil production (thousand b/d)
constituting a y/y fall of 309 thousand b/d, the steepest fall
Crude NGLs Total
since November 2005. This brings the year-to-date decline to 2007 1,459 153 1,612
129 thousand b/d, offsetting the stabilisation that had been 2008 1,354 152 1,506
09Q2 1,372 146 1,518
emerging in UK output lately. As a result, UK oil production in H1 09Q3 1,141 104 1,245
10 is running far below consensus expectations (Barcap: -0.11 Dec 1,276 134 1,409
mb/d, IEA: -0.05 mb/d, EIA: -0.07 mb/d and OPEC: -0.07 mb/d). 09Q4 1,291 130 1,420
2009 1,302 133 1,435
We expect UK oil production to remain weak, with decline rates Jan 1,340 128 1,467
stepping up to average 150 thousand b/d in 2011. UK oil Feb 1,253 138 1,391
Mar 1,397 149 1,546
demand picked up after the setbacks seen in April and May, with
10Q1 1,333 138 1,471
total inland deliveries 16 thousand b/d higher y/y, with a m/m Apr 1,346 144 1,489
increase of 19 thousand b/d. Gasoline remained the weakest May 1,265 135 1,401
Jun 1,049 109 1,157
part of the barrel, declining 23 thousand b/d, but the strength in y/y change -279 -30 -309
jet fuel (up 33 thousand b/d y/y) and diesel (up 17 thousand 10Q2 1,220 129 1,350
b/d y/y) more than compensated that fall. We expect the 2010 1,276 134 1,410
y/y change -114 -15 -129
improvement shown in June to continue.
Figure 45: Oil output and 12-month average (mb/d) Figure 46: The 40 largest UK oil fields by 12-month rolling
average crude output (thousand b/d)
3.2 Field May 10 m/m y/y 12 month
3.0 change change average
Buzzard 82 -124 -86 172
2.8 Forties 59 1 6 63
2.6 Clair 49 0 -4 49
Foinaven 42 1 -2 44
2.4 Elgin 47 13 0 43
Franklin 40 3 3 41
2.2 Captain 44 -2 1 39
2.0 Callanish n.a n.a n.a 38
Alba 29 -1 -7 31
1.8 Magnus 33 2 5 29
Wytch Farm 20 0 -1 21
1.6 Mungo 18 0 -1 19
1.4 Harding 20 0 4 17
Nelson 16 -3 -6 16
1.2 Ninian 16 -1 -4 16
Schiehallion 52 -9 30 15
1.0 Blake 20 8 4 15
96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 Claymore 13 -1 8 14
Machar 14 -1 1 13
Scott 14 0 2 13
Brodgar n.a n.a n.a 13
Figure 47: y/y change in oil output (thousand b/d) Gryphon 15 -4 8 13
Telford 9 -2 5 12
Ivanhoe n.a n.a n.a 11
100 MacCulloch 11 0 11 11
Bittern 12 0 -1 11
Nevis 13 2 0 11
0 Chestnut 8 -1 5 11
Donan (Maersk) 8 6 -9 11
Jade 9 0 -4 11
-100 Pierce 11 0 -1 10
Ettrick n.a n.a n.a 9
Cormorant N 11 2 2 9
Tern 9 0 1 9
-200
West Brae 8 1 0 9
Douglas 12 4 0 9
Blane 9 0 9 9
-300
Gannet F 7 0 -5 9
Madoes 6 -1 -4 8
Beryl 8 -1 -2 8
-400 Grouse n.a n.a n.a 8
Jacky 9 2 3 8
Shearwater 10 3 0 8
-500 Brent 8 -5 -1 8
03 04 05 06 07 08 09 10 11 Andrew 6 -2 -6 8
United Kingdom
Figure 48: Oil demand and 12-month average (mb/d) Figure 49: UK inland deliveries (thousand b/d)
Jun 10 c hange from c h from
1.8 M ay 10 Jun 09 2010 2009
G a soline 358 4 -23 352 -22
D iesel 440 24 17 430 15
1.7 Jet fuel 257 5 33 232 -15
G a soil 105 17 2 106 -2
Naphtha 18 -17 -8 28 3
1.6 L PG 99 -11 -5 97 -3
Kerosene 42 -10 3 195 2
F uel oil 22 -1 -13 29 -8
1.5 Bitum en 39 11 6 26 1
L ubes 8 -1 -1 8 -1
Other 66 -2 6 65 0
1.4 T otal 1,453 19 16 1,463 -32
1.3
96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
Figure 50: Gasoline use and 12-month average (mb/d) Figure 51: Diesel use and 12-month average (mb/d)
0.50
0.54
0.46
0.50
0.46 0.42
0.42 0.38
0.38 0.34
0.34 0.30
0.30 0.26
96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
Figure 52: Refinery output (thousand tonnes) Figure 53: y/y in total inland deliveries (thousand b/d)
Jun 10 c hange from c h from
M ay 10 Jun 09 2009 2009 250
L PG 210 -19 -4 186 -2
Na phtha 86 -35 -21 151 18 200
M otor Spirit 1,837 156 186 1,669 -14 150
Jet fuel 619 128 42 458 -26
Burning oil 86 -91 -34 235 -18 100
G a soil/ diesel 2,310 212 211 1,988 -144 50
F uel oil 592 6 -122 562 -140
L ubrica nts 17 -1 3 30 16 0
Bitum en 134 11 3 93 -7 -50
Other 37 2 1 39 4
T otal output 6,098 299 286 5,605 -264 -100
Tota l throughput 6,322 109 135 5,965 -316 -150
R efinery fuel use 310 -36 -65 333 -51
-200
-250
03 04 05 06 07 08 09 10 11
Mexico
Mexican liquids production averaged 2.948 mb/d in July, the second Figure 54: Oil production (thousand b/d)
consecutive y/y increase since September 2004, of 21 thousand b/d.
Crude N G Ls Total
Of course, the y/y increase was partly due to some favourable base 2007 3,076 396 3,471
2008 2,799 366 3,166
effects, but overall, the y/y declines have slowed significantly (down
09Q2 2,590 375 2,965
by just 19 thousand b/d), as continued measures implemented by 09Q3 2,567 368 2,935
09Q4 2,583 370 2,953
Pemex, including the ramping up of production at the KMZ fields, to
2009 2,601 370 2,971
counteract the steep decline rates, have come to fruition. However, Ja n 2,615 378 2,993
F eb 2,610 377 2,988
we see limited continued success ahead and forecast a decline of
M ar 2,595 384 2,980
0.07 mb/d and 0.12mb/d in 2010 and 2011 respectively. Mexican 10Q1 2,607 380 2,987
Apr 2,593 382 2,976
exports increased sharply to 1.39 mb/d, and along with a higher
May 2,593 383 2,977
average realised price for Maya, the value of crude oil exports rose Jun 2,546 385 2,931
10Q2 2,578 383 2,962
m/m by 0.7 bn, to $2.93 bn, The overall trade balance jumped above
Jul 2,573 375 2,948
$1bn following the weakness in June to $1.57bn, up about $200 mn y/ y change 12 9 21
2010 to da te 2,589 381 2,970
on the year. Mexican oil demand, however, fell back in July after five
y/ y change -29 10 -19
consecutive months of growth, with the total down 3.2% y/y to 1.74
mb/d, due to softer readings in fuel oil, diesel and gasoline.
Figure 55: Oil output and 12 month average (mb/d) Figure 56: y/y change in oil output (thousand b/d)
3.9
300
3.8
3.7 200
3.6 100
3.5
0
3.4
-100
3.3
3.2 -200
3.1 -300
3.0
-400
2.9
-500
2.8
02 03 04 05 06 07 08 09 10 11
96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
Figure 57: Crude oil exports (mb/d) Figure 58: Inland deliveries (thousand b/d)
Jul 10 c hange from 2010 c h from
2.2 Jun 10 Jul 09 to date 2009
2.1 G asoline 798 -23 -10 799 14
2.0 D iesel 367 -28 -6 368 10
1.9 Jet fuel 64 7 10 59 3
L PG 268 7 5 285 8
1.8
F uel oil 200 -23 -19 198 10
1.7 Asphalt 21 -7 -16 22 -10
1.6 Other 24 -16 -21 42 -4
1.5 T otal oil 1,741 -82 -58 1,774 31
Na t gas (m m cf/ d) 3,249 -210 196 3,270 226
1.4
1.3
1.2
1.1
1.0
01 02 03 04 05 06 07 08 09 10 11
Mexico
Figure 59: Oil, gas and petrochemical trade balances ($ million)
EXPORTS IMPORTS
Crude Products Petro- Total Products Petro- Gas Total Balance Oil Balance
chemicals exports chemicals imports
2007 37,932 4,059 242 42,584 15,798 0 0 16,938 25,645 26,194
2008 43,341 5,537 349 49,543 21,893 0 0 23,474 26,069 26,985
09Q2 6,124 1,060 33 7,248 3,114 0 0 3,281 3,967 4,070
09Q3 6,954 1,240 51 8,260 3,877 0 0 4,046 4,214 4,318
09Q4 8,081 1,530 45 9,686 4,127 0 0 4,406 5,279 5,484
2009 25,693 4,671 147 30,615 13,310 0 0 14,106 16,509 17,054
Jan 2,633 452 12 3,103 1,189 9 100 1,298 1,805 1,895
Feb 2,426 365 22 2,817 1,406 13 78 1,497 1,320 1,385
Mar 2,977 388 12 3,387 1,752 9 53 1,814 1,573 1,612
10Q1 8,036 1,204 46 9,307 4,348 0 0 4,609 4,698 4,892
Apr 2,905 436 26 3,370 1,729 13 57 1,798 1,571 1,612
May 3,345 293 31 3,669 1,658 19 84 1,761 1,908 1,979
Jun 2,239 319 21 2,578 1,621 10 107 1,738 841 937
10Q2 8,488 1,047 78 9,617 5,008 0 0 5,297 4,320 4,528
Jul 2,933 405 24 3,362 1,679 17 95 1,792 1,570 1,659
y/y change 464 57 7 520 265 9 48 323 197 256
2010 to date 2,787 380 21 3,191 1,578 13 82 1,673 1,518 1,588
y/y change 905 58 11 969 614 3 34 651 318 350
Figure 60: Monthly oil trade surplus ($ billion) Figure 61: Monthly net oil product imports ($ million)
3.5 2500
3.0
2000
2.5
1500
2.0
1000
1.5
500
1.0
0.5 0
01 02 03 04 05 06 07 08 09 10 11 01 02 03 04 05 06 07 08 09 10 11
Figure 62: Average price of Maya crude exports ($/b) Figure 63: Discounts from US formulae ($/b)
130 03 04 05 06 07 08 09 10 11
120 4
110
100 2
90
80 0
70
60 -2
50
-4
40
30
-6
20
10
-8
01 02 03 04 05 06 07 08 09 10 11 Olmeca Isthmus Maya
Brazil
Reversing two months of sequential declines, Brazil’s liquids Figure 64: Oil production (thousand b/d)
oil production rose in July, averaging 2.5 mb/d, an increase
Crude NGL Biofuel Total
of 24 thousand b/d over June 2009 levels. The m/m growth 2007 1,748 85 357 2,190
was dominated by higher NGLs and biofuel output, although 2008 1,812 86 347 2,246
in terms of y/y comparisons crude oil output account for 09Q2 1,938 77 344 2,359
09Q3 1,957 76 350 2,382
almost 90% of the gains. For the year-to-date total liquids 09Q4 1,992 80 333 2,405
production growth stands at 148 thousand b/d, slightly 2009 1,950 79 341 2,370
ahead of our 0.13 mb/d forecast for the full year. A healthy Jan 1,997 80 374 2,450
Feb 2,017 79 384 2,480
pipeline of projects should enable Brazil to maintain its Mar 2,037 75 351 2,463
position as key contributor to non-OPEC supply growth; we 10Q1 2,017 78 369 2,464
Apr 2,077 86 360 2,523
estimate Brazilian production growth to speed up slightly
May 2,075 83 331 2,489
next year and average 140 thousand b/d. Meanwhile Jun 2,051 76 350 2,477
Brazilian oil demand continues to grow robustly, rising 130 10Q2 2,068 81 347 2,496
Jul 2,056 85 360 2,501
thousand b/d y/y and staying above 2mb/d for the second
y/y change 137 12 5 155
consecutive month. Year-to-date Brazilian oil demand is 2010 to date 2,044 81 358 2,483
higher by more than 9%. y/y change 120 2 16 137
Figure 65: Output and 12-month average (mb/d) Figure 66: y/y change in oil output (thousand b/d)
2.6 400
325
2.4
250
2.2
175
2.0 100
25
1.8
-50
1.6
-125
1.4 -200
00 01 02 03 04 05 06 07 08 09 10 11 01 02 03 04 05 06 07 08 09 10 11
Figure 67: Biofuel output and 12-month average (kb/d) Figure 68: y/y change in domestic sales (thousand b/d)
410 260
390 210
160
370
110
350 60
330 10
310 -40
-90
290
-140
270 -190
250 -240
00 01 02 03 04 05 06 07 08 09 10 11 01 02 03 04 05 06 07 08 09 10 11
India
The latest Indian data showed a pick-up in growth rates in Figure 69: Domestic sales (thousand b/d)
July with domestic sales coming in at 2.87 mb/d,
Domestic sales Imports Refinery runs
constituting a 8.6% increase y/y. Diesel sales rose by 7% y/y 2007 2,535 2,388 3,133
to 1.2 mb/d, while gasoline demand rose by 15% y/y 2008 2,702 2,541 3,269
09Q2 2,862 2,646 3,130
following the 13% rise in June, buoyed by continued 09Q3 2,639 2,592 3,194
increases in auto sales. Having dipped back slightly in June, 09Q4 2,827 2,526 3,365
2009 2,822 2,584 3,245
naphtha demand rose in July, coming in 7% higher y/y, with Jan 2,787 2,920 3,423
the sharp double-digit declines seen since April 2009 Feb 3,173 2,793 3,165
M ar 3,102 2,374 3,403
following the start-up of gas supplies from the offshore D6 10Q1 3,016 2,693 3,336
project seeming to be wearing off, aided by the start up of Apr 3,154 2,866 3,211
M ay 3,115 2,729 3,362
IOC’s naphtha cracker at Panipat, with a capacity of about 3
Jun 3,123 3,059 3,300
mt/yr. We see continued gains in Indian oil demand ahead, 10Q2 3,130 2,883 3,292
constituting the three pillars of non-OECD oil demand Jul 2,873 3,119 3,407
y/y change 227 750 412
growth along with China and the Middle East, forecasting a 2010 to date 3,044 2,837 3,327
y/y growth of 0.16 mb/d in 2010 and 0.14 mb/d in 2011. y/y change 170 261 149
Figure 70: Refinery runs and 12 month average (mb/d) Figure 71: y/y change in domestic sales (thousand b/d)
350
3.5
3.3 250
3.1
150
2.9
50
2.7
2.5 -50
06 07 08 09 10 11 06 07 08 09 10 11
Figure 72: y/y change in gasoline sales (thousand b/d) Figure 73: y/y change in diesel sales (thousand b/d)
100 200
80
150
60
100
40
50
20
0
0
-20 -50
06 07 08 09 10 11 06 07 08 09 10 11
International rig counts

The international oil rig count edged lower in August to stand at Figure 74: International drilling activity (rigs)
837, a fall of 3 rigs relative to July’s level. The relative small drop Oil rig counts Aug-10 m/m change y/y change
masks significant variations across regions, with drilling activity Total 837 -3 110
in Europe plummeting (-14 rigs) while other regions showed Africa 69 5 18
Asia Pacific 200 1 23
small increases. African and Latin America saw their rig count
Europe 54 -14 8
rising by 5 and 4 rigs respectively. On a country basis UK (-3), Latin America 326 4 39
Norway (-3) and Argentina (-3) led the decline. Overall the total Middle East 188 1 22
rig count now stands at 837, 5 rigs above the pre crisis peak OPEC 189 1 20
Non-OPEC 648 -4 90
reached in mid 2008, reflecting a significant pick up in activity
India 97 0 24
following the price recovery. Not surprisingly, incremental Mexico 73 3 -32
activity has been concentrated in non-OPEC countries with the Brazil 63 0 6
addition of 90 rigs since August 2009. While rig utilization has Argentina 62 -3 27
Venezuela 61 -1 13
also risen in OPEC, the speed of increase has been much gentler
Colombia 45 3 19
and at 189 the OPEC rig count is still well below the 200 + Oman 38 0 2
averaged during H110. The international gas rig count dropped Egypt 32 3 11
by 5 rigs in August to stand at 235. Indonesia 32 1 -4
Saudi Arabia 31 -1 -10
Syria 30 0 6
Figure 75: International oil rig count
China (offshore) 26 1 4
Kuwait 20 3 9
900 Algeria 17 1 -3
Nigeria 16 1 10
800 UK 15 -3 2
Vietnam 15 1 11
Yemen 14 2 7
700 UAE 13 0 0
Libya 13 0 0
600 Others 124 -14 8
Gas rig counts
500 Total 235 -5 39
Africa 12 -1 5
Asia Pacific 60 1 14
400
Europe 21 -1 -1
Latin America 59 -1 6
300 Middle East 83 -3 15
96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 Note : The Baker-Hughes International counts exclude the USA and Canada,
and no longer reports data for Iran
Figure 76: International gas rig count Figure 77: Non-OPEC oil rig count
260 700
240 650
220 600
550
200
500
180
450
160
400
140
350
120 300
100 250
80 200
96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
International rig counts
Figure 78: Venezuelan oil rig count Figure 79: Mexican oil rig count
120 110
100
100
90
80
80
70
60 60
50
40
40
30
20
20
0 10
96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
Figure 80: Argentinean oil rig count Figure 81: Indian oil rig count
80 110
70 100
90
60
80
50
70
40
60
30
50
20
40
10 30
0 20
96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
Figure 82: Brazilian oil rig count Figure 83: Saudi Arabian oil rig count
70 60
65
60 50
55
50
40
45
40
30
35
30
25 20
20
15 10
96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
Japan
The latest Japanese figures for July placed oil demand at 3.71 Figure 84: Source of crude imports (thousand b/d)
mb/d, rebounding strongly after June's poor showing, increasing Jul 10 change from 2010 ch from
by 62 thousand b/d (1.7%) y/y. LPG (down 90 thousand b/d) Jun 10 Jul 09 to date 2009
was the largest declining component, as the rest of the barrel Saudi Arabia 865 -117 -260 1205 87
UAE 756 140 17 770 -25
showed considerable strength. In particular, gasoline demand Iran 460 154 18 413 -48
was up 76 thousand b/d y/y and gasoil demand by 37 thousand Qatar 429 -9 -32 499 39
b/d. With the large declines in fuel oil demand starting to ease, FSU 313 92 163 150 -16
Kuwait 220 58 56 250 -83
as the base effects pertaining to the return of nuclear availability Iraq 116 55 51 153 85
for power generation start to normalise, it remains largely flat Neutral Zone 115 48 70 78 3
y/y. Overall, Japanese oil demand is up by 50 thousand b/d for Oman 103 -22 21 237 159
Indonesia 77 13 14 97 29
the year-to-date, mostly in line with our figures of a 0.01 mb/d
Sudan 37 -16 -59 40 -4
increase, but outperforming consensus expectations which Nigeria 32 32 32 0 0
continue to expect negative growth. Japanese oil inventories Malaysia 18 18 0 8 -6
Ecuador 14 14 14 0 0
continue to run at low levels, with crude oil inventories running
Others 22 -69 -61 184 92
6.5 mb lower than five-year averages and total crude and Total 3577 392 47 4083 313
product stocks some 16.7 mb lower than the five-year average.
Figure 85: Source of crude imports, July 2010 Figure 86: Imports by region, July 2010
Others Saudi Africa

Asia
15% Arabia 2%
3%
24% Other
10%
Kuwait
6%
FSU
9%
UAE
Qatar
21%
12%
Middle East
Iran
85%
13%
Figure 87: Crude oil imports (mb/d) Figure 88: y/y change in imports (thousand b/d)
4.7 900
4.5
500
4.3
4.1
100
3.9
3.7 -300
3.5
3.3 -700
3.1
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec -1100
2009 5 year average 2010 03 04 05 06 07 08 09 10 11
Japan
Figure 89: Inland deliveries (thousand b/d) Figure 90: Inland deliveries (thousand b/d)
Jul 10 change 2010 chn from
6.3 Jun 10 Jul 09 to date 2009
Gasoline 1,074 110 76 982 12
5.8 Naphtha 735 5 17 805 88
Jet fuel 94 -5 0 93 4
Kerosene 127 -28 13 374 11
5.3
Gasoil 566 24 37 549 1
Fuel oil 'A' 220 -15 11 279 -10
4.8 Other fuel oil 328 66 -14 279 -53
Asphalt and lubes 70 -3 2 79 5
4.3 Direct crude use 105 56 10 72 0
LPG 392 -36 -90 475 -8
3.8 Total 3,711 174 62 3,986 50
3.3
99 00 01 02 03 04 05 06 07 08 09 10 11
Figure 91: y/y change in oil demand (thousand b/d) Figure 92: Gasoline demand (mb/d)
800 1.20
600
1.15
400
200 1.10
0
1.05
-200
1.00
-400
-600 0.95
-800
0.90
-1000
-1200 0.85
03 04 05 06 07 08 09 10 11 99 00 01 02 03 04 05 06 07 08 09 10 11
Figure 93: Kerosene demand (mb/d) Figure 94: Total fuel oil demand (mb/d)
1.2 1.4
1.3
1.0
1.2
1.1
0.8
1.0
0.6 0.9
0.8
0.4
0.7
0.6
0.2
0.5
0.0 0.4
99 00 01 02 03 04 05 06 07 08 09 10 11 99 00 01 02 03 04 05 06 07 08 09 10 11
Japan
Figure 95: Total oil inventories (mb) Figure 96: Oil inventories (mb)
Jul 10 change from ch from
250 Jun 10 Jul 09 5 yr av.
Gasoline 12.4 -2.0 -0.7 -0.1
240
Naphtha 14.2 2.1 3.2 1.9
230 Kerosene 12.4 1.6 -3.9 -5.0
Gasoil 11.2 0.3 -1.0 -0.2
220 Fuel oil 19.1 -0.4 3.6 0.1
LPG 25.2 0.8 0.0 -3.5
210 Other 6.2 -0.7 -3.4 -3.3
Total products 100.7 1.7 -2.2 -10.1
200
Crude oil 106.1 1.4 1.5 -6.5
190 Crude + products 206.9 3.2 -0.7 -16.7
180
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2009 5 year average 2010
Figure 97: Crude oil inventories (mb) Figure 98: Oil product inventories (mb)
120 130
115 125
120
110
115
105 110
100 105
100
95
95
90 90
85 85
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2009 5 year average 2010 2009 5 year average 2010
Figure 99: Kerosene inventories (mb) Figure 100: Crude runs through refineries (mb/d)
30 4.4
4.2
25
4.0
20 3.8
15 3.6
3.4
10
3.2
5 3.0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2009 5 year average 2010 2009 5 year average 2010
Norway
The Norwegian Petroleum Directorate data for July, while Figure 101: Oil production (thousand b/d)
showing a slight rebound m/m, came in 315 thousand b/d
Crude NGLs Condensate Total
lower y/y, at 2.117 mb/d, plagued by technical and well 2007 2,211 286 54 2,550
problems. Production from the Vale field was closed due to 2008 2,108 275 67 2,451
technical problems and production from Gullfaks C and 09Q2 1,857 263 79 2,198
09Q3 1,943 269 70 2,282
Tordis was closed periodically due to well problems. 09Q4 2,020 284 71 2,375
Preliminary data for August pegged total liquids output at 2009 1,990 277 76 2,342
1.823 mb/d, the lowest since September 1991 and the Jan 1,987 281 72 2,341
Feb 1,957 300 80 2,337
second below 2 mb/d this year, also for the first time since Mar 1,912 283 71 2,266
that year. This constituted a y/y decline of a massive 0.417 10Q1 1,952 288 74 2,314
mb/d y/y, taking the year-to-date decline to 203 thousand Apr 1,886 277 81 2,243
May 1,853 274 68 2,196
b/d, underperforming all consensus expectations once again. Jun 1,531 261 80 1,872
Planned maintenance work and unplanned outages have 10Q2 1,758 271 76 2,105
severely crippled North Sea volumes, thereby supporting Jul 1,800 253 64 2,117
y/y change -271 -32 -12 -315
Brent spreads, which have tightened significantly over the 2010 to date 1,846 275 74 2,195
last month. y/y change -162 -2 -8 -172
Figure 102: Output and 12 month average (mb/d) Figure 103: Production by field (thousand b/d)
Jun 10 1 month 2010 change
3.6 change to date from 2009
Alve 10 -1 10 0
3.4 Alvheim 84 4 86 0
Åsgard 176 -4 175 -2
3.2 Balder 46 -3 49 -8
Brage 36 0 34 3
3.0 Draugen 46 15 43 -19
Ekofisk 55 -119 164 -38
2.8 Eldfisk 6 -51 48 -4
Fram 56 2 55 -3
2.6 Gimle 0 -4 4 -2
Grane 172 -7 171 -13
2.4 Gullfaks 51 -16 71 -11
Gullfaks Sør 37 -16 54 -12
2.2 Gyda 1 -4 5 -3
Heidrun 4 -52 52 -28
2.0 Kirstin 43 -1 50 -20
Kvitebjørn 74 12 71 17
1.8 Mickell 25 1 25 0
96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 Njord 19 0 16 3
Norne 39 6 37 -2
Ormen Lange 26 -2 29 0
Figure 104: y/y change in oil output (thousand b/d) Oseberg 69 -27 102 -4
Oseberg Øst 6 -1 6 0
Oseberg Sør 41 -3 45 0
Rev 1 -5 5 1
400 Ringhorn 19 -1 21 -7
Sigyn 12 1 10 -4
Sleipner 10 1 8 -1
200 Sleipner Vest 36 3 32 -3
Snohvit 27 17 23 7
Snorre 109 24 113 -1
0
Statfjord 55 0 52 -4
Tambar 0 -6 5 -1
Tordis 0 -12 12 -7
-200
Troll 140 -11 148 -6
Tyrihans 93 18 63 33
-400 Ula 3 -17 21 7
Urd 8 1 8 2
Valhall 6 -32 34 -7
-600 Varg 24 0 25 12
Veslefrikk 14 1 13 1
Vilje 32 -1 31 2
-800 Visund 31 1 29 3
Volve 32 -3 38 -12
02 03 04 05 06 07 08 09 10 11 Others 97 -35 127 -2
China
Chinese oil demand indications remain very supportive for Figure 105: Oil output, imports and runs (thousand b/d)
August. Demand growth picked up again following a slower
Output Imports Refinery runs
reading in July, taking the y/y increase to 0.63 mb/d. Adding to 2007 3,760 3,286 6,593
continued robust demand for middle-distillates, the August 2008 3,827 3,602 6,875
09Q2 3,822 4,028 7,474
numbers showed a substantial improvement in both gasoline
09Q3 3,850 4,418 7,869
and residual fuel oil. For the year to date overall demand growth 09Q4 3,834 4,612 8,089
is now running at 0.87mb/d, and 2010 as a whole in on track to 2009 3,818 4,104 7,516
Feb 3,966 4,859 8,376
show China’s second largest annual growth ever (Barcap
Mar 4,011 4,994 8,193
estimate: 0.79mb/d). While net product imports were up slightly 10Q1 3,993 4,629 8,181
on the month, the rise in demand continues to be met primarily Apr 3,984 5,186 8,429
May 4,066 4,230 8,486
via higher runs which for the year to date are 1.1 mb/d higher. In Jun 4,136 5,457 8,661
light of the continued strength in demand, crude oil imports 10Q2 4,062 4,950 8,525
rebounded from the low hit in July, up 0.45 mb/d m/m and 0.58 Jul 4,084 4,505 8,365
Aug 4,133 4,955 8,234
y/y. Meanwhile crude oil production growth continues to exceed y/y change 263 577 515
consensus expectations, reaching 4.13 mb/d in August, a y/y 2010 to date 4,048 4,775 8,340
increase of 263 thousand b/d. y/y change 241 877 1,107
Figure 106: Output and 12-month average (mb/d) Figure 107: y/y change in implied oil demand (kb/d)
4.2 1900
4.1 1600
4.0 1300
3.9
1000
3.8
700
3.7
400
3.6
3.5 100
3.4 -200
3.3 -500
03 04 05 06 07 08 09 10 11 03 04 05 06 07 08 09 10 11
Figure 108: y/y change in refinery runs of crude oil (mb/d) Figure 109: y/y change in implied diesel demand (kb/d)
2.1 900
1.8
650
1.5
1.2
400
0.9
0.6 150
0.3
-100
0.0
-0.3
-350
-0.6
-0.9 -600
03 04 05 06 07 08 09 10 11 03 04 05 06 07 08 09 10 11
China
Figure 110: Source of crude oil imports, August 2010 Figure 111: Source of crude oil imports (thousand b/d)
change from 2010 ch from
Aug 10 Jul 10 Aug 09 to date 2009
Angola Angola 946 409 162 846 276
19% Saudi Arabia 938 -30 361 856 88
Iran 461 -21 -2 393 -129
Oman 415 98 192 318 45
Others Iraq 243 74 77 204 75
40% Brazil 223 81 123 176 108
Russia 223 -43 -102 325 16
Sudan 212 5 -102 254 19
Saudi Kuwait 193 -3 70 201 45
Arabia Kazakhstan 162 -45 35 196 90
19% Libya 159 -3 30 151 56
Venezuela 112 -115 -47 151 85
UAE 109 12 12 101 42
Congo 93 1 12 91 -3
Iraq Iran Ecuador 69 47 -33 18 -22
5% Oman
9% Colombia 65 34 -1 45 28
8% Indonesia 61 51 26 32 -31
Malaysia 51 17 -10 50 11
Figure 112: Crude oil imports by region, August 2010 Argentina 35 16 35 16 -5
Australia 33 -85 6 52 24
Others 152 -49 -268 299 59
Total 4956 450 578 4775 877
South
America of which
10% OPEC 3246 354 421 2982 524
non-OPEC 1710 96 156 1793 353
North America 0 0 -24 17 10

Middle East South America 504 62 77 408 195
Africa Africa 1503 426 -115 1463 348
49%
30% Asia-Pacific 158 -65 -5 189 12
FSU 415 -57 -68 525 104
Middle East 2374 84 713 2162 203
Europe 0 0 0 11 6
Asia-Pacific
FSU
3%
8%
Figure 113: Imports and 12 month average (mb/d) Figure 114: y/y change in crude imports (thousand b/d)
5.5 1.8
5.0
1.4
4.5
4.0
1.0
3.5
3.0 0.6
2.5
0.2
2.0
1.5
-0.2
1.0
0.5 -0.6
01 02 03 04 05 06 07 08 09 10 11 01 02 03 04 05 06 07 08 09 10 11
US oil production
US oil liquids production averaged 8.35 mb/d in June, Figure 115: US oil production (thousand b/d)
representing a y/y increase of 0.41 mb/d. While production was Crude NGLs Others Total
slightly lower on the month, overall it has steadied around 8.35 2007 5,064 1,783 614 7,461
mb/d since November 2009. Crude oil production was flat m/m 2008 4,964 1,789 789 7,542
09Q2 5,232 1,896 829 7,956
but up by 282 thousand b/d y/y. The Midwest and the Gulf 09Q3 5,320 1,907 872 8,098
Coast are two regions delivering production gains. The pace of Dec 5,460 1,937 910 8,307
09Q4 5,449 1,953 888 8,291
output growth in PADD 2 in particular is accelerating. Midwest 2009 5,310 1,886 850 8,047
output in June reached 686 thousand b/d, an increase of 123 Jan 5,433 1,910 855 8,198
Feb 5,465 1,979 874 8,318
thousand b/d y/y. The strong performance is attributable to Mar 5,502 2,003 906 8,411
intensifying activity in the Bakken shale, with the North Dakota 10Q1 5,467 1,964 878 8,309
Apr 5,496 1,980 881 8,357
rig count at the end of June 223% higher y/y. Gulf Coast May 5,468 2,019 910 8,397
production was up 200 thousand b/d y/y in June while the rest Jun 5,465 1,965 923 8,353
y/y change 282 64 64 410
of the country (West Coast, Rocky Mountains and East Coast) 10Q2 5,476 1,988 905 8,369
saw output contracting 86 thousand b/d y/y. We expect the 2010 to date 5,472 1,976 892 8,339
y/y change 237 134 72 443
pace of US output growth to decelerate going forward, mainly
due to lower growth from the US Gulf Coast.
Figure 116: Total output and 12 month average (mb/d) Figure 117: y/y change in total output (thousand b/d)
9.0 2200
8.5 1700
1200
8.0
700
7.5
200
7.0
-300
6.5 -800
6.0 -1300
02 03 04 05 06 07 08 09 10 03 04 05 06 07 08 09 10
Figure 118: y/y change in crude output (thousand b/d) Figure 119: y/y change in NGL output (thousand b/d)
500
1500
400
1000 300
200
500 100
0
0
-100
-200
-500
-300
-1000 -400
03 04 05 06 07 08 09 10 03 04 05 06 07 08 09 10
US data revisions
US oil demand for June was left almost unchanged in the latest Note: Preliminary indications of monthly US series can be derived from the
weekly data as reported in Weekly Petroleum Status Report. The first revisions
Petroleum Supply Monthly, revised marginally lower by 48 of this preliminary data, plus more detailed disaggregated data, are released by
thousand b/d to 19.291 mb/d. Gasoline and diesel demand the Energy Information Administration (EIA) in Petroleum Supply Monthly, two
months after the end of the month under revision. Final revisions are released
were revised lower slightly by 68 thousand b/d and 30 thousand in Petroleum Supply Annual, normally in October the following year. In the
b/d to 9.284 mb/d and 3.759 mb/d, respectively, but still remain comparisons that follow, those that involve unrevised data from this year with
the original unrevised data from last year are shown in the tables below as Wk
higher y/y by 1.1% and 7%. Jet fuel demand saw some hefty v Wk. Comparisons showing revised data are marked as Mth v Mth. The
upward revision of 143 thousand b/d to above 1.5 mb/d, comparison using all data that held before the release of the latest revisions is
marked as Wk v Mth. The fullest information is given by Mth v Mth and is in
swinging it into positive growth territory y/y by almost 6%, and our view superior to all other measures, while Wk v Mth shows the full
in line with the strength shown in the IATA data for international information set prior to revision. Such Wk v Mth comparisons are shown as
white bars in the graphs on the following pages. Finally, Wk v Wk involves
air freight and passenger traffic. Residual fuel oil demand was retaining known errors, but indicates the view as seen by those relying on
also revised higher, though it remains lower y/y by some 11%. unrevised comparisons from the weekly data.
Overall, US oil demand in June remained higher y/y by a solid

463 thousand b/d (2.5%), and came in at the highest level since
October 2008, showing a strong rebound from the troughs seen
during the recession. US inventories were revised higher by 11.5
mb, with all of that coming from products.
Figure 120: US oil inventories, revisions and y/y comparisons (mb)

Inventories Jun 10 Revision y/y change
Mth v Mth Wk v Mth Wk v Wk
Gasoline 214.8 -3.2 0.8 4.0 5.5
Total distillate 157.9 -1.1 -2.0 -1.0 1.4
Heating oil 44.6 -1.9 -0.1 1.8 1.8
Diesel 113.4 0.8 -1.9 -2.7 -0.3
Jet fuel 44.9 -1.8 0.9 2.7 4.1
Residual 42.3 -1.0 5.4 6.3 6.5
Unfinished oils 83.4 3.9 -8.3 -12.3 -10.4
Other oils 206.2 3.0 -13.5 -16.5 -22.0
Total products 749.4 12.2 -16.8 -29.0 -27.4
Crude 362.7 -0.7 14.0 14.7 15.3
Total 1112.1 11.5 -2.8 -14.3 -12.1
Figure 121: US oil demand, revisions and y/y comparisons (thousand/b/d)

Demand Jun 10 Revision y/y change
Mth v Mth Wk v Mth Wk v Wk
Gasoline 9284 -68 104 172 170
Distillate 3759 -30 246 276 467
Jet Fuel 1507 143 82 -61 -6
Residual 505 63 -61 -124 -238
Main four products 15055 108 371 263 393
Other 4236 -156 92 248 523
Total 19291 -48 463 511 916
US data revisions
Figure 122: y/y change in total oil inventories (mb) Figure 123: Total relative to 5-year average (mb)
140 120
120
100
100
80 80
60 60
40
40
20
0 20
-20 0
-40
-60 -20
-80 -40
05 06 07 08 09 10 11 05 06 07 08 09 10 11
Figure 124: y/y change in crude oil inventories (mb) Figure 125: Crude oil relative to 5-year average (mb)
60
60
50
40
40
20 30
20
0
10
-20 0
-10
-40
-20
-60
-30
05 06 07 08 09 10 11
05 06 07 08 09 10 11
Figure 126: y/y change in oil product inventories (mb) Figure 127: Products relative to 5-year average (mb)
80
80
60 60
40
40
20
0 20
-20
0
-40
-60 -20
05 06 07 08 09 10 11 05 06 07 08 09 10 11
US data revisions
Figure 128: y/y change in gasoline inventories (mb) Figure 129: Gasoline relative to 5-year average (mb)
25 25
20
20
15
15
10
10
5
5
0
-5 0
-10 -5
-15 -10
-20 -15
05 06 07 08 09 10 11 05 06 07 08 09 10 11
Figure 130: y/y change in distillate inventories (mb) Figure 131: Distillate relative to 5-year average (mb)
50 40
40
30
30
20 20
10
10
0
-10
0
-20
-10
05 06 07 08 09 10 11
05 06 07 08 09 10 11
Figure 132: y/y change in “other oils” inventories (mb) Figure 133: “Other oils” relative to 5-year average (mb)
50 35
40 30
25
30
20
20 15
10 10
5
0
0
-10
-5
-20 -10
-30 -15
05 06 07 08 09 10 11 05 06 07 08 09 10 11
MARKETS AND PRICES
Price ranges and crude oil forward curves

Figure 134: WTI range, last 25 days ($/b) Figure 135: Brent range, last 25 days ($/b)
78 81
79
76
77
74
75
72
73
70 71
19-Aug 26-Aug 02-Sep 09-Sep 16-Sep 23-Sep 19-Aug 26-Aug 02-Sep 09-Sep 16-Sep 23-Sep
Figure 136: Gasoline range, last 25 days (cents/gal) Figure 137: Henry Hub range, last 25 days ($/mmbtu)
205 4.5
200 4.3
195 4.1
190 3.9
185 3.7
180 3.5
19-Aug 26-Aug 02-Sep 09-Sep 16-Sep 23-Sep 19-Aug 26-Aug 02-Sep 09-Sep 16-Sep 23-Sep
Figure 138: WTI forward curve ($/b) Figure 139: WTI forward curve trading range ($/b)
95 98 Range in 2010
23-Sep-10
One month ago
80 93 Two months ago
88
65
23-Sep-10 1 year ago
83
50 2 years ago 3 years ago
5 years ago 78
35
73
20 Years to expiry
1 2 3 4 5 6 6 7 68
Years to expiry 1 2 3 4 5 6 6 7 8
Saudi Arabian crude oil pricing

Figure 140: Adjustment factors ($/b) Figure 141: Adjustment factors for Asia ($/b)
Jun Jul Aug Sep Oct
8
To Asia
Arab Super Light 2.20 1.25 1.10 0.25 1.00 6
Arab Extra Light 1.35 0.65 0.80 0.20 0.30 4

Arab Light 0.20 -0.20 -0.15 -0.65 -0.50
2
Arab Medium -1.60 -1.75 -1.75 -2.15 -2.05
0
Arab Heavy -2.90 -2.95 -3.00 -3.40 -3.35
To US -2
Arab Super Light
Arab Extra Light 1.70 1.30 1.45 1.15 1.20 -4 Arab Extra Light
Arab Light
Arab Light -0.35 -0.40 -0.40 -0.45 -0.35 -6 Arab Medium
Arab Medium -2.15 -2.10 -2.10 -2.00 -1.90 Arab Heavy
-8
Arab Heavy -3.70 -3.40 -3.50 -3.35 -3.30
00 01 02 03 04 05 06 07 08 09 10
To Europe
Arab Extra Light -2.20 -1.10 -0.35 -1.70 -0.50
Arab Light -3.55 -2.15 -1.40 -2.40 -1.65 Figure 142: Adjustment factors for Europe ($/b)
Arab Medium -5.45 -3.90 -3.05 -3.90 -3.15
2
Arab Heavy -6.55 -4.85 -3.90 -4.60 -4.15
Notes : 0
All prices are on a fob Saudi Arabia basis.
The marker for Asian sales is the average of Dubai and Oman, evaluated as an -2
average of month of bill of lading.
The marker for European sales is the Brent Weighted Average (BWAVE), as -4
declared by the IPE in London, evaluated 40 days around after bill of lading.
The marker for US sales is West Texas Intermediate (WTI), evaluated 50 days -6
after bill of lading.
-8
Arab Extra Light
-10
Arab Light
-12 Arab Medium
Arab Heavy
-14
00 01 02 03 04 05 06 07 08 09 10
Figure 143: Monthly average values in US market ($/b) Figure 144: Adjustment factors for US ($/b)
140 5
Arab light
120 Arab heavy
0
100
-5
80
60 -10
Arab Extra Light
40 Arab Light
-15 Arab Medium
Arab Heavy
20
-20
0 00 01 02 03 04 05 06 07 08 09 10
03 04 05 06 07 08 09 10
MARKET BALANCES AND FORECASTS
Supply-demand projections
Figure 145: Oil market balances from four sources (mb/d)
Annual Annual Annual
Barclays Capital 2009 change Q110 Q210 Q310 Q410 2010 change Q111 Q211 Q311 Q411 2011 change
Demand 84.7 -1.40 86.0 85.7 86.8 87.0 86.4 1.71 87.6 86.9 88.3 88.5 87.8 1.46
OECD demand 45.6 -2.29 45.7 44.9 45.6 46.0 45.6 0.01 46.0 44.9 45.7 46.1 45.7 0.09
non-OECD demand 39.1 0.88 40.2 40.8 41.2 41.0 40.8 1.70 41.6 42.0 42.6 42.4 42.2 1.36
Non-OPEC supply 50.3 0.57 51.1 50.9 50.4 50.9 50.8 0.54 51.0 50.8 50.3 50.9 50.7 -0.08
non-OPEC excluding FSU 37.5 0.21 38.2 37.8 37.3 37.8 37.8 0.24 38.0 37.7 37.2 37.7 37.7 -0.13
FSU 12.7 0.36 13.0 13.0 13.0 13.1 13.0 0.30 13.0 13.1 13.1 13.2 13.1 0.05
OPEC NGLs/condensates 5.4 0.42 5.8 5.9 6.0 6.1 5.9 0.55 6.4 6.5 6.6 6.7 6.5 0.60
Call on OPEC crude + stocks 29.0 -2.40 29.0 29.0 30.4 30.0 29.6 0.62 30.2 29.6 31.4 31.0 30.6 0.94
OPEC crude 28.6 -2.63 29.1 29.0 29.3 29.5 29.2 0.63 29.6 30.2 30.5 30.5 30.2 0.96
OPEC 11 crude 26.2 -2.70 26.5 26.6 26.8 26.9 26.7 0.50 27.1 27.7 28.0 28.0 27.7 0.99
Stockbuild 0.1 0.5 0.5 -0.7 -0.1 0.0 -0.2 1.0 -0.5 -0.1 0.1

IEA 2009 change Q110 Q210 Q310 Q410 2010 change Q111 Q211 Q311 Q411 2011 change
Demand 84.7 -1.23 86.1 86.6 86.8 87.0 86.6 1.89 87.6 87.6 88.0 88.3 87.9 1.27
OECD demand 45.5 -2.13 45.9 45.2 45.4 45.9 45.6 0.15 45.9 44.8 45.2 45.6 45.4 -0.22
non-OECD demand 39.3 0.90 40.1 41.4 41.4 41.1 41.0 1.74 41.7 42.8 42.9 42.7 42.5 1.49
Non-OPEC supply 51.7 0.79 52.7 52.6 52.2 52.8 52.6 0.89 53.3 52.8 52.6 53.1 52.9 0.36
non-OPEC excluding FSU 38.4 0.31 39.2 39.1 38.6 39.0 39.0 0.55 39.5 39.0 39.0 39.2 39.2 0.19
FSU 13.3 0.48 13.5 13.5 13.6 13.9 13.6 0.34 13.8 13.8 13.6 13.9 13.8 0.17
OPEC NGLs/condensates 4.7 5.0 5.0 5.2 5.4 5.2 0.50 5.7 5.8 5.8 5.9 5.8 0.64
Call on OPEC crude + stocks 28.4 28.4 29.0 29.3 28.8 28.9 0.49 28.6 29.0 29.6 29.3 29.2 0.27
OPEC crude 28.7 29.1 29.0 - - - - - - - - - -
Stockbuild 0.3 0.6 0.0 - - - - - - - -

OPEC 2009 change Q110 Q210 Q310 Q410 2010 change Q111 Q211 Q311 Q411 2011 change
Demand 84.5 0.00 84.9 84.8 85.7 86.6 85.5 1.05 86.1 85.7 86.7 87.7 86.6 1.05
OECD demand 45.5 0.00 45.9 44.9 45.0 46.0 45.5 -0.02 46.0 44.9 45.0 46.2 45.5 0.06
non-OECD demand 39.0 0.00 39.1 39.9 40.7 40.5 40.1 1.07 40.1 40.8 41.7 41.5 41.1 0.99
Non-OPEC supply 51.1 0.74 52.2 52.2 51.8 52.1 52.1 0.92 52.3 52.2 52.3 52.9 52.4 0.36
non-OPEC excluding FSU 38.2 0.38 39.1 39.0 38.5 38.7 38.8 0.64 38.9 38.8 38.9 39.4 39.0 0.19
FSU 13.0 0.36 13.1 13.2 13.3 13.4 13.2 0.28 13.4 13.4 13.4 13.5 13.4 0.17
OPEC NGLs+ non-conv. oil 4.4 0.21 4.6 4.8 4.8 5.0 4.8 0.45 5.2 5.3 5.4 5.4 5.3 0.50
Call on OPEC crude + stocks 29.0 83.51 28.1 27.8 29.2 29.5 28.7 -0.32 28.6 28.2 29.1 29.4 28.8 0.19
OPEC crude 28.7 -2.50 29.2 29.1 - - - - - - - - - -
Stockbuild -0.3 1.1 1.2 - - - - - - - -

US Department of Energy 2009 change Q110 Q210 Q310 Q410 2010 change Q111 Q211 Q311 Q411 2011 change
Demand 84.3 -1.43 85.4 86.0 86.1 86.4 86.0 1.62 87.5 87.0 87.4 87.6 87.4 1.41
OECD demand 45.4 -2.14 45.8 44.8 45.0 45.8 45.4 -0.05 46.1 44.6 45.0 45.7 45.4 -0.02
non-OECD demand 38.9 0.71 39.6 41.1 41.0 40.6 40.6 1.67 41.4 42.4 42.4 41.9 42.0 1.43
Non-OPEC supply 50.5 0.71 51.4 51.4 51.0 50.9 51.2 0.70 51.5 51.4 50.5 50.7 51.0 -0.16
non-OPEC excluding FSU 37.6 0.34 38.3 38.3 37.8 37.9 38.1 0.48 38.3 38.3 37.5 37.7 37.9 -0.13
FSU 12.9 0.37 13.1 13.2 13.2 13.0 13.1 0.22 13.2 13.2 13.0 13.0 13.1 -0.03
OPEC NGLs/condensates 4.8 0.34 5.1 5.3 5.6 5.7 5.4 0.66 6.0 6.1 6.2 6.2 6.1 0.68
Call on OPEC crude + stocks 29.1 -2.48 28.9 29.2 29.5 29.8 29.4 0.26 30.0 29.4 30.8 30.7 30.2 0.89
OPEC crude 29.1 -2.17 29.4 29.4 29.4 29.3 29.4 0.27 29.5 29.7 30.4 30.0 29.9 0.52
Stockbuild 0.0 0.5 0.2 -0.1 -0.5 0.0 -0.5 0.3 -0.4 -0.7 -0.4
Notes: The latest IEA numbers are taken from IEA Monthly Oil Report September 2010. OPEC data comes from OPEC’s Monthly Oil Market Report, September 2010.
The US DOE numbers are from Energy Information Administration, Short Term Energy Outlook September 2010. The IEA includes about 0.3 mb/d of Saudi Arabian
ethane in both its demand and its OPEC NGLs estimates. The IEA and OPEC do not project OPEC crude oil output. In all numbers refinery gain is included as part of the
figures for non-OPEC supply excluding the FSU. All of the estimates shown above include Angola and Ecuador in OPEC for both forward looking and historic data. All
numbers show Indonesia as part of the non-OPEC tally.
Non-OPEC supply
Figure 146: Non-OPEC supply and projected annual changes
Barclays Estimates 2010 increase 2011 increase

2009 2010 2011 Barclays IEA DOE OPEC Barclays IEA DOE OPEC
North America 14.19 14.38 14.32 0.19 0.16 0.23 0.33 -0.05 -0.15 -0.13 0.03
Canada 3.22 3.23 3.29 0.01 0.07 0.03 0.02 0.06 0.03 0.07 0.10
Mexico 2.97 2.91 2.79 -0.06 -0.03 -0.09 -0.06 -0.12 -0.16 -0.16 -0.10
USA 8.00 8.24 8.25 0.24 0.11 0.29 0.37 0.01 -0.02 -0.03 0.02
S+C America 4.17 4.38 4.56 0.21 0.23 0.29 0.30 0.17 0.32 0.19 0.27
Argentina 0.72 0.71 0.69 -0.02 -0.01 -0.01 -0.01 -0.02 -0.02 -0.02 -0.02
Brazil 2.39 2.51 2.66 0.13 0.13 0.17 0.20 0.14 0.23 0.16 0.21
Colombia 0.67 0.77 0.82 0.10 0.12 0.11 0.11 0.05 0.12 0.06 0.08
Europe 4.59 4.25 3.95 -0.35 -0.24 -0.26 -0.25 -0.30 -0.23 -0.34 -0.20
Denmark 0.26 0.25 0.24 -0.01 - - -0.02 -0.01 - - -0.04
Norway 2.34 2.15 2.01 -0.19 -0.17 -0.15 -0.14 -0.14 -0.10 -0.13 -0.10
UK 1.43 1.33 1.18 -0.11 -0.05 -0.07 -0.07 -0.15 -0.10 -0.17 -0.07
Middle East 1.69 1.69 1.65 0.00 0.02 0.02 0.03 -0.04 0.02 -0.03 -0.01
Oman 0.86 0.89 0.90 0.03 0.06 0.04 0.05 0.01 0.06 0.00 0.05
Syria 0.43 0.43 0.41 -0.01 -0.01 0.00 0.00 -0.02 -0.02 -0.01 -0.04
Yemen 0.29 0.26 0.24 -0.02 -0.01 -0.03 -0.02 -0.02 -0.01 -0.01 -0.02
Asia Pacific 7.70 7.92 8.02 0.23 0.24 0.22 0.16 0.10 -0.01 0.16 0.06
Australia 0.59 0.57 0.56 -0.01 0.00 0.00 -0.01 -0.01 0.04 -0.02 0.03
Brunei 0.20 0.19 0.19 -0.01 - - 0.00 0.00 - - 0.00
China 3.81 4.04 4.09 0.23 0.21 0.14 0.18 0.05 -0.04 0.03 0.01
India 0.77 0.80 0.81 0.03 0.05 0.06 0.05 0.01 0.03 0.02 0.05
Indonesia 0.95 0.95 0.96 0.01 0.01 0.01 0.00 0.01 -0.03 0.00 -0.02
Malaysia 0.71 0.68 0.66 -0.02 -0.03 0.00 -0.04 -0.02 -0.04 -0.02 -0.06
Vietnam 0.29 0.30 0.36 0.01 - 0.05 0.01 0.06 - 0.13 0.04
Africa 2.75 2.72 2.70 -0.03 -0.03 -0.03 -0.02 -0.01 0.04 0.03 0.05
Chad 0.20 0.19 0.18 -0.01 - - -0.01 -0.01 - - -0.01
Egypt 0.60 0.58 0.58 -0.02 -0.01 -0.02 0.00 0.00 -0.01 0.01 -0.01
Equatorial Guinea 0.32 0.30 0.28 -0.02 - -0.03 -0.03 -0.02 - 0.00 -0.01
Gabon 0.24 0.23 0.25 -0.01 0.00 -0.01 0.00 0.01 0.01 -0.02 0.00
Sudan 0.48 0.51 0.51 0.02 - 0.03 -0.01 0.00 - -0.01 -0.02
Former Soviet Union 12.74 13.04 13.09 0.30 0.34 0.22 0.28 0.05 0.17 -0.03 0.17
Azerbaijan 1.01 1.05 1.13 0.04 - 0.07 0.04 0.08 - 0.13 0.10
Kazakhstan 1.46 1.53 1.58 0.07 - 0.05 0.08 0.05 - 0.04 0.06
Russia 9.92 10.09 10.01 0.17 0.24 0.12 0.17 -0.08 0.06 -0.20 0.00
Demand
Figure 147: Demand forecasts and projected annual changes
Barclays Estimates 2010 increase 2011 increase

2009 2010 2011 Barclays IEA DOE OPEC Barclays IEA DOE OPEC
North America 23.40 23.79 24.05 0.39 0.37 0.29 0.32 0.26 -0.04 0.19 0.22
Canada 2.15 2.21 2.23 0.06 0.09 0.08 - 0.02 -0.01 0.03 -
Mexico 2.05 2.05 2.07 0.01 0.07 0.06 - 0.02 0.03 0.03 -
USA 18.77 19.10 19.32 0.32 0.21 0.16 - 0.22 -0.05 0.13 -
S+C America 6.16 6.35 6.55 0.20 0.24 0.16 0.16 0.20 0.21 0.12 0.12
Brazil 2.54 2.68 2.80 0.14 0.14 0.12 - 0.12 0.10 0.13 -
Other S+C America 3.62 3.68 3.76 0.06 0.10 0.04 - 0.08 0.11 -0.01 -
Europe 15.20 14.85 14.73 -0.35 -0.19 -0.21 -0.40 -0.11 -0.07 -0.16 -0.15
France 1.83 1.80 1.79 -0.03 - - - -0.01 - - -
Germany 2.44 2.34 2.33 -0.10 - - - -0.01 - - -
Italy 1.53 1.47 1.46 -0.05 - - - -0.01 - - -
Spain 1.46 1.41 1.36 -0.05 -0.05 -
UK 1.67 1.62 1.61 -0.05 - - - -0.01 - - -
EU 5 8.93 8.65 8.56 -0.27 -0.17 - - -0.09 -0.07 - -
Middle East 7.01 7.19 7.38 0.18 0.27 0.35 0.19 0.19 0.34 0.32 0.19
Iran 1.52 1.52 1.55 0.00 0.01 - - 0.03 0.06 - -
Saudi Arabia 1.82 1.97 2.09 0.14 0.15 - - 0.12 0.15 - -
Asia Pacific 25.58 26.82 27.64 1.24 0.97 0.77 0.69 0.82 0.61 0.67 0.58
China 8.42 9.20 9.71 0.79 0.76 0.65 0.47 0.50 0.39 0.53 0.42
India 3.15 3.31 3.45 0.16 0.08 0.11 - 0.14 0.11 0.07 -
Japan 4.37 4.39 4.35 0.03 -0.06 -0.13 - -0.04 -0.12 -0.15 -
Korea 2.18 2.17 2.16 -0.02 0.02 - - -0.01 -0.01 - -
Other Asia-Pacific 7.46 7.74 7.97 0.28 0.17 - - 0.23 0.24 - -
Africa 3.12 3.15 3.19 0.03 0.03 0.08 0.03 0.04 0.12 0.07 0.03
Former Soviet Union 4.21 4.23 4.29 0.03 0.18 0.18 0.05 0.06 0.11 0.19 0.04
World 84.67 86.38 87.83 1.71 1.89 1.62 1.05 1.46 1.27 1.41 1.05
OECD 45.57 45.58 45.67 0.01 0.15 -0.05 -0.02 0.09 -0.22 -0.02 0.06
Non-OECD 39.10 40.80 42.16 1.70 1.74 1.67 1.07 1.36 1.49 1.43 0.99
Macroeconomic forecasts
Figure 148: Barclays Capital GDP forecasts

Real GDP Real GDP
% over previous period saar % annual changes
4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 2009 2010 2011
Global 4.9 5.2 4.6 3.6 3.6 3.8 4.1 -0.8 4.7 4.1
Developed 3.2 3.1 2.7 2.3 2.1 2.0 2.3 -3.5 2.4 2.3
Emerging 7.0 7.9 6.9 5.3 5.4 6.1 6.3 2.5 7.5 6.4
BRIC 6.5 9.2 6.9 7.4 6.7 7.1 7.3 5.2 8.8 7.8
Americas 5.7 4.0 3.0 2.4 3.3 2.9 3.3 -2.6 3.5 3.1
United States 5.0 3.7 1.6 2.5 3.0 2.5 3.0 -2.6 2.8 2.8
Canada 4.9 5.8 2.0 2.5 3.0 3.0 3.0 -2.5 3.2 2.8
Latin America 7.6 4.4 7.0 2.3 3.9 4.0 4.2 -2.5 5.4 4.1
Argentina 5.5 7.5 7.5 6.2 3.2 3.3 3.3 -4.0 6.1 3.8
Brazil 9.3 11.4 4.0 2.8 3.5 4.0 5.5 -0.2 7.3 4.4
Chile 6.5 -6.0 18.4 7.5 7.0 6.0 6.0 -1.5 5.2 6.8
Colombia 4.5 5.3 5.0 3.0 4.5 4.5 4.5 0.8 4.5 4.3
Mexico 10.1 -2.5 13.5 -0.5 3.5 3.5 3.0 -6.5 5.0 3.3
Peru 6.1 10.1 5.3 6.3 7.1 7.0 5.4 0.9 7.1 6.4
Venezuela -3.7 -10.6 -8.4 -2.9 4.6 3.5 0.9 -3.3 -5.4 2.0
Asia/Pacific 6.4 9.2 6.5 6.1 5.6 6.3 6.4 3.8 7.7 6.3
Japan 3.4 5.0 1.5 4.0 0.6 1.2 0.1 -5.2 3.2 1.4
Australia 4.4 2.7 4.8 3.4 2.7 2.2 4.7 1.2 3.3 3.5
Emerging Asia 7.2 10.5 7.8 6.8 7.0 7.7 8.0 6.1 9.0 7.6
China 11.0 9.2 8.4 9.3 9.3 8.9 8.9 9.1 10.1 9.0
Hong Kong 10.0 8.7 5.7 -5.9 -0.8 7.0 7.0 -2.8 5.1 4.0
India -3.0 13.4 7.8 8.0 7.0 8.0 8.0 6.7 8.8 8.3
Indonesia 6.6 5.3 6.6 7.8 6.1 4.9 6.1 4.5 6.3 6.2
Korea 0.7 8.8 6.0 2.8 1.4 4.7 6.2 0.2 6.1 4.0
Malaysia 12.5 6.7 6.6 2.2 3.0 5.5 7.2 -1.7 7.5 5.0
Philippines 7.2 14.6 9.7 -5.9 6.1 7.4 7.8 1.1 7.0 5.0
Singapore -1.0 45.7 24.0 -15.4 2.3 7.0 8.0 -1.3 14.5 4.0
Taiwan 16.7 10.9 7.2 0.2 0.6 5.2 5.7 -1.9 9.0 4.0
Thailand 17.0 13.9 0.6 1.0 2.0 5.1 5.1 -2.2 8.0 4.0
Europe and Africa 2.0 1.6 3.9 1.9 1.3 1.9 2.0 -4.4 2.3 2.6
Euro area 0.8 1.4 3.9 1.3 1.1 1.4 1.8 -4.0 1.6 1.9
Germany 1.2 1.9 9.0 2.7 1.4 2.0 1.8 -4.7 3.3 2.5
France 2.3 0.7 2.5 1.4 1.2 1.5 2.1 -2.5 1.5 1.8
Italy -0.4 1.6 1.5 1.6 1.5 1.2 1.1 -5.1 1.1 1.5
Spain -0.7 0.6 0.7 -1.5 -1.1 -0.2 1.3 -3.7 -0.5 0.4
Netherlands 2.4 2.0 3.6 0.4 2.0 2.2 2.2 -3.9 1.8 2.0
United Kingdom 1.7 1.3 4.9 1.4 2.1 2.1 2.3 -4.9 1.6 2.3
EM Europe and Africa 5.1 2.0 3.3 3.5 1.3 2.8 2.3 -5.0 4.2 4.3
Czech Republic 2.2 2.0 2.3 2.2 2.5 2.9 3.1 -4.1 1.9 2.9
Hungary 1.0 2.6 0.0 0.8 1.0 3.2 3.3 -6.3 1.1 3.6
Poland 8.4 -4.1 6.2 3.2 3.5 4.3 0.4 1.7 2.9 3.3
Russia 0.9 0.1 1.7 3.2 -1.3 1.4 1.7 -7.9 4.5 5.0
Turkey 15.8 10.0 6.0 5.5 4.0 4.0 4.0 -4.7 6.3 4.0
South Africa 3.2 4.6 3.2 3.3 4.6 4.1 4.0 -1.8 3.0 4.0
Note: Weights used for real GDP are based on IMF PPP-based GDP (2008). Source: Barclays Capital
Barclays Capital price forecasts Figure 149: Value of OPEC basket of crude oils, 1999-2010 ($/b)
WTI Brent US nat gas 140

$/b $/b $/mmbtu
Forecasts 120
2010 78.0 78.0 4.51 100

Q1 actual 78.9 77.4 4.91
Q2 actual 78.1 79.4 4.26 80
Q3 76.0 76.0 4.00 60

Q4 78.0 77.0 4.75
2011 85.0 85.0 4.10 40
2015 137.0 135.0 5.75 20
History 0
99 00 01 02 03 04 05 06 07 08 09 10 11
1985 27.9 27.5 2.60
1986 15.1 14.4 1.71
1987 19.2 18.4 1.53 Figure 150: WTI monthly averages 1983-2010 ($/b)
1988 16.0 15.0 1.71
1989 19.6 17.7 1.77 140
1990 24.5 23.3 1.70
1991 21.5 19.9 1.53 120
1992 20.6 19.3 1.73 100

1993 18.5 17.2 2.11
1994 17.2 15.9 1.94 80
1995 18.4 16.9 1.69 60

1996 22.0 20.3 2.50
1997 20.6 19.3 2.48 40
1998 14.4 13.3 2.16 20

1999 19.3 18.0 2.32
2000 30.3 28.5 4.32 0
84 87 90 93 96 99 02 05 08 11
2001 26.0 24.9 4.05
2002 26.1 25.0 3.37
2003 31.0 28.5 5.49 Figure 151: Gas futures monthly averages 1990-2010
2004 41.5 38.0 6.18 ($/mmbtu)
2005 56.7 55.3 9.48
2006 66.2 66.1 6.98 14
2007 72.4 72.7 7.12
Q1 58.2 58.6 7.19 12
Q2 65.0 68.6 7.65 10

Q3 75.1 74.6 6.24
8
Q4 90.5 88.5 7.39
2008 99.7 98.4 8.89 6
Q1 97.8 96.3 8.74
4
Q2 123.8 122.8 11.47
Q3 118.2 117.2 8.98 2
Q4 59.1 57.5 6.40
0
2009 62.1 62.7 4.16
90 93 96 99 02 05 08 11
Q1 43.3 45.7 4.47
Q2 59.8 59.9 3.81
Q3 68.2 68.9 3.44
Q4 76.1 75.5 4.93
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COMMODITIES RESEARCH September 2010

1. FOCUS: CANADA – THE BATTLE FOR THE NEXT ENERGY FRONTIER 3

2. OPEC PRODUCTION ESTIMATES 12

3. MONTHLY AND QUARTERLY DATA RELEASES 15

4. MARKETS AND PRICES 36

5. MARKET BALANCES AND FORECASTS 38

Canada: the battle for the next energy frontier

1700 Oil sands 1,600 Alberta Saskatchewan Eastern Canada Others

1600 Conventional 1,400

350 2007 2008 2009 2010 2000 8000

300 1800 7000

250 1600 6000

Figure 7: Details of Canadian oil sands projects

Figure 8: Details of cancelled/delayed projects, thousand b/d

Project names Status Capacity Initial start-up

0.9 Bitumen Syncrude 50

3.5 Production growth, mb/d 2.3 Conventional

Box 1: The what, where and how of oil sands

Figure 13: Hydrocarbon resources in Alberta, Canada

Source: Government of Alberta, Barclays Capital

Box 2: Challenges of the oil sands industry

OPEC PRODUCTION ESTIMATES

Figure 15: Estimates of OPEC production, August 2010, mb/d

Range and average of OPEC output estimates

Range and average of OPEC output estimates

MONTHLY DATA SOURCES

US crude oil imports

Others heavy crude 3771 -293 53 3715 -101

US crude oil imports

International rig counts

International rig counts

Others Saudi Africa

North America 0 0 -24 17 10

Overall, US oil demand in June remained higher y/y by a solid

Figure 120: US oil inventories, revisions and y/y comparisons (mb)

Figure 121: US oil demand, revisions and y/y comparisons (thousand/b/d)

MARKETS AND PRICES

Price ranges and crude oil forward curves

Saudi Arabian crude oil pricing

Arab Extra Light 1.35 0.65 0.80 0.20 0.30 4

MARKET BALANCES AND FORECASTS

Annual Annual Annual

Annual Annual Annual

Annual Annual Annual

Figure 146: Non-OPEC supply and projected annual changes

Barclays Estimates 2010 increase 2011 increase

Figure 147: Demand forecasts and projected annual changes

Barclays Estimates 2010 increase 2011 increase

Figure 148: Barclays Capital GDP forecasts

WTI Brent US nat gas 140

2010 78.0 78.0 4.51 100

Q3 76.0 76.0 4.00 60

2015 137.0 135.0 5.75 20

1992 20.6 19.3 1.73 100

1995 18.4 16.9 1.69 60

1998 14.4 13.3 2.16 20

Q2 65.0 68.6 7.65 10

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