The Flowing Oil Chartbook December 14, 2016

Transcription

1 The Flowing Oil Chartbook December 14, 2016 RESEARCH ANALYSTS Jan Stuart Edward Westlake Research Analyst Research Analyst Johannes Van Der Tuin Jonathan Aronson Abraham Kahn Research Analyst Research Analyst Research Analyst DISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES, ANALYST CERTIFICATIONS, LEGAL ENTITY DISCLOSURE AND THE STATUS OF NON-US ANALYSTS. US Disclosure: Credit Suisse does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.

2 Table of Contents The Big Picture The International Scene Oil Macro US Gulf Coast (USGC) Permian Mid Continent West Coast East Coast Technicals NGLs Other Including VMT, Rack Margins, & Fixtures 2

3 Headlines What s Moving We ll Continue to Chart the Path Happy Holidays, See You in 2017 Oil markets rally on Khalid Al-Falih s Draghi moment Prompt Brent prices closed at $55.72/b yesterday, the high for the year. Among a string of bullish catalysts, one we like especially much came from the Saudi Minister of Energy, Industry, and Mineral Resources who underlined that the kingdom will do whatever it takes, including supply cuts below their committed ceiling, and/or flowing less than 10 Mb/d. He rather overshadowed the otherwise also historic moment of 11 non members formally joining the sovereign intervention. Near term path risk While Opec et al. have agreed to reduce supply effective January 1, the physical market still needs to digest excess crude produced in the run up to negotiations and the Nov 30 agreement, which could mean a wave of US imports. Additionally, we are entering a seasonally weak market for crude, with US refinery maintenance just around the corner, in February and March (p. 12). All of this appears to be priced into the WTI futures curve, which features an odd pattern of twists and turns, contangoed at the front. We suspect that flat price can lurch down near-term on this physical weakness and long spec net length. Managed money net length rockets higher in data through 12/6 Brent MM net length in futures set a new 52 week high as longs entered and shorts fled (p. 5). WTI positioning is near the 52 week high, and more shorts fled than longs entered post the Opec deal (p. 80). The US inventory surplus did fall a little further The DoE reported crude surplus remained flat on a ~2.6 mb draw, while the gasoline surplus was cut to ~10 mbs from ~15 mbs on flat inventories (p. 5). The distillate surplus also fell, by ~2.7 mbs on a slight nominal draw. As we move into 2017, markets, ministers, and others will look to these data for evidence of a tightening s/d. Latest IEA data show third consecutive monthly stock draw Reported OECD commercial inventories drew by ~26 mbs in October, and have shed ~75 mbs since July equal to ~800 kb/d (p. 5). Roughly one third of the ~75 mbs draw involves crude oil. The Agency is also changing its tone, choosing to highlight upward demand revisions and prospects of more big draws in H Unveiling our updated global oil balances We incorporate the Opec+ production deal as well as a string of other supply side adjustments (e.g. raising our estimate of Iran s NGLs and condensate output). On the demand side we raise our 2017 growth outlook to 1.4 Mb/d from less than ~0.9 Mb/d, and reveal a new projection for 2018 with more tentatively ~1.2 Mb/d of growth. Among the larger adjustments ranks our raising of 2016 demand in China, which largely involves inflating the adjustment we make to run-rates of independent refiners to ~350 kb/d. For next year we raised US estimates, partly on the back of Trump s policy promises, but more so because of a large increase in projected ethane demand. For full details see pages 37, 38, and Our revised monthly global s/d track through 2017 is featured on page 5. Happy Holidays and see you next year! This will be the last Flowing Oil Chartbook of 2016, but we will be back and better than ever on January 4, It s been a wild year for crude markets; we hope you found the guidance in these pages helpful. 3

4 Headlines What s Moving Refining Margins & Spreads Focusing in on US dynamics Refining Margins: Weekly average PADD 3 (LLS) margins were higher by.58/bbl last week to $10.92/bbl. Average PADD 5 (ANS) cracks were down by $2.41/bbl to $12.59/bbl. Average PADD 1 (Brent) margins narrowed to $9.54/bbl (down -12.2% or $1.33/bbl) and PADD 2 (WTI) cracks decreased by.48/bbl to $9.43/bbl. PADD 4 (WTI) cracks grew by $4.09/bbl to $15.95/bbl. Mid-Con Crude Spreads: The WTI-LLS widened this past week to -$1.62/bbl. A) Northern Mid-Con Diffs: LLS WCS diffs were up.1/bbl to $17.06/bbl, while Syncrude averaged a discount of $3.71/bbl vs LLS (as compared to a $3.8/bbl discount last week). LLS Bakken differentials narrowed to $3.94/bbl. B) Midland Diffs: The LLS Midland WTI spread averaged.94/bbl (down.18/bbl) while the average LLS-WTS spread narrowed by.40/bbl to $2.35/bbl. Gulf and West Coast Crude Spreads: The weekly Brent LLS widened, averaging.41/bbl. LLS MARS narrowed, averaging $4.23/bbl. The average LLS MAYA spread was around $7.54/bbl. The weekly average ANS KERN spread narrowed by.75/bbl from the previous week to $12.21/bbl. Source: Credit Suisse Research, the BLOOMBERG PROFESSIONAL service, Platts 4

5 Headlines Key Charts to Watch The week s outstanding new data US inventory surplus to the average should roll further (Mbs) 250 other reported ex NGLs distillate 200 gasoline crude 150 total reported ex NGLs Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Reported OECD commercial oil inventories are falling (includes ARA; Mbs) yr range 5 yr average 3, ,100 3,000 2,900 2,800 2,700 2,600 2,500 Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Our new global supply and demand track through 2017 (3 mma; Mb/d) 100 Demand 99 (3 mma) Supply Jan-14 Jan-15 Jan-16 Jan-17 approx impact of Opec deal Brent Managed Money net length soared to 52-week highs this past week 600 Long MM Contracts Shorts J-13 M-13 S-13 J-14 M-14 S-14 J-15 M-15 S-15 J-16 M-16 S-16 Source: Credit Suisse Research, the BLOOMBERG PROFESSIONAL service, ICE, IEA, EIA, JODI, BP, Petrologistics, Country Data 5

6 The Big Picture

7 The Big Picture Brent Structure Brent and WTI flat price with shaded area for Bollinger Bands ($/b) $140 Brent Price Brent 200 mav WTI Price WTI 200 mav $120 $100 $80 $60 $40 $20 J-11 J-12 J-13 J-14 J-15 J-16 Brent futures curves ($/b) $75 $65 $55 $45 $35 $25 12/9/ /8/ /2/ /9/ Brent structure differentials (1-6) ($/b) $ Backwardation: Bullish $6 $3 -$3 Brent physical vs. spot futures ($/b) $ $1 -$1 -$2 -$6 Contango: Bearish J M J S N -$3 Jan Mar May Jul Sep Nov Source: Credit Suisse Research, the BLOOMBERG PROFESSIONAL service 7

8 The Big Picture WTI-Brent & Product Futures Curves WTI Brent futures curves ($/b) 12/9/2015 $- 11/8/ /2/ /9/2016 $(1) $(2) $(3) WTI futures curves ($/b) $75 $65 $55 $45 12/9/ /8/ /2/ /9/2016 $(4) $35 $(5) $ ICE Gasoil futures curves ($/MT) 12/9/ /8/2016 $750 12/2/ /9/2016 $650 $550 $450 $350 RBOB futures curves ($/gal) $2.40 $1.90 $ /9/ /8/ /2/ /9/2016 $ Source: Credit Suisse Research, the BLOOMBERG PROFESSIONAL service 8

9 The Big Picture Key Crack Spreads from Around the US US Gulf Coast ($/b) (LLS based) $30 $25 $20 $15 $10 $5 -$5 US Mid-Continent ($/b) (WTI based) $60 $50 $40 $30 $20 $ US East Coast ($/b) (Brent based) US West Coast ($/b) (ANS based) $20 $70 $15 $60 $50 $10 $40 $30 $5 $20 $10 Source: Credit Suisse Research, the BLOOMBERG PROFESSIONAL service, Platts 9

10 The Big Picture Key Crack Spreads vs Forecasts US Gulf Coast ($/b) (LLS based) 5 yr range 5 yr avg 2015 $30 CS fcst 2016 $25 $20 $15 $10 $5 -$5 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec US Mid-Continent ($/b) (WTI based) $60 $50 $40 $30 $20 $10 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 5 yr range 5 yr avg 2015 CS fcst 2016 US East Coast ($/b) (Brent based) $25 $20 $15 $10 $5 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 5 yr range 5 yr avg 2015 CS fcst 2016 US West Coast ($/b) (ANS based) 5 yr range 5 yr avg 2015 $60 CS fcst 2016 $50 $40 $30 $20 $10 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: Credit Suisse Research, the BLOOMBERG PROFESSIONAL service, Platts 10

11 The Big Picture Key Crack Spreads vs Forecasts US Gulf Coast ($/b) (WTI based) US Rockies ($/b) (WTI based) $45 5 yr range 5 yr avg 2015 CS fcst 2016 $55 5 yr range 5 yr avg 2015 CS fcst 2016 $35 $45 $25 $35 $25 $15 $15 $5 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec $5 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec SING ($/b) (Dubai Fateh based) NW Europe ($/b) (Brent based) $20 5 yr range 5 yr avg 2015 CS fcst 2016 $15 5 yr range 5 yr avg 2015 CS fcst 2016 $15 $10 $10 $5 $5 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: Credit Suisse Research, the BLOOMBERG PROFESSIONAL service, Platts 11

12 The Big Picture US Refinery Runs US crude runs (Mb/d) 18 5 year average US crude inventories (Mbs) year average Total utilization (% of total refinery operable capacity) 100% 5 year average % 80% Total US CDU maintenance forecast (kb/d of capacity offline) yr ave frcst 2016 actuals % 0 Source: Credit Suisse Research, EIA 12

13 The Big Picture PADDs I-IV PADD I IV East of Rockies crude runs (Mb/d) 15 5 year average PADD I IV East of Rockies crude inventories (Mbs) year average PADDs I IV East of Rockies utilization (% of total refinery operable capacity) 100% 4 year average % PADD I IV East of Rockies CDU maintenance frcst (kb/d of capacity offline) yr ave frcst 2016 actuals % 85% % 0 Source: Credit Suisse Research, EIA 13

14 The Big Picture US Inventories and Forward Cover US crude inventories (Mbs) year average PADD I IV East of Rockies crude inventories (Mbs) year average US crude days of forward cover 35 5 year average PADD I IV East of Rockies crude days of forward cover 40 5 year average Source: Credit Suisse Research, EIA 14

15 The Big Picture US Inventory Surplus & Product Detail US inventory surplus to the avg (Mbs) 250 other reported ex NGLs distillate 200 gasoline crude 150 total reported ex NGLs Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 PADD I gasoline inventories (Mbs) 75 5 year average PADD III gasoline inventories (Mbs) PADD I middle distillate inventories (Mbs) year average year average Source: Credit Suisse Research, EIA 15

16 The Big Picture US Production and Imports US domestic crude production, weekly data (Mb/d) 10 5 year average exit rate 2016 PADD I IV East of Rockies domestic crude production, monthly data (Mb/d) 9 5 year average exit rate D US crude oil imports (Mb/d) 12 5 year average PADD I IV East of Rockies crude oil imports (Mb/d) 10 5 year average Source: Credit Suisse Research, EIA 16

17 The Big Picture Transport Differentials Map Source: VLO 17

18 The Big Picture US Storage Capacity Shell crude storage capacity (thousands of barrels) PADDs I II III IV V US Total In Operation Idle In Operation Idle In Operation Idle In Operation Idle In Operation Idle In Operation Idle Refineries 16, , ,650 2,192 4, ,924 2, ,852 6,244 Tank Farms (excluding SPR) 6, ,637 3, ,493 8,745 20, ,423 1, ,636 13,058 Of which at Cushing, OK , Tankers, Barges and Pipes na SPR (Crude only) , Total (excluding SPR): 23,539 1, ,314 3, ,143 10,937 25, ,347 3, ,821 19,302 Working crude storage capacity (thousands of barrels) PADDs I II III IV V US Total Refineries 14,915 20,106 76,215 4,174 36, ,546 Of which is likely to be max fill in reality 12,640 18,508 59,573 3,561 30, ,974 Tank Farms (excluding SPR) 5, , ,038 16,502 28, ,662 Of which at Cushing, OK 73,014 73,014 Volumes in transit * ,000 SPR (Crude only) 727, ,000 Total (excluding SPR):** 22, , ,382 25,034 73, ,636 (*) Note: Volumes estimates based on March 4, 2015 note by EIA (**) Note: Total assumes a level of max fill at refineries below the EIA working capacity number Crude Oil Stocks (thousands of barrels) PADDs 12/9/2016 I II III IV V US Total Standard EIA stock number 13, , ,133 24,334 50, ,193 Crude storage capacity utilization (thousands of barrels) 12/9/2016 I II PADDs III IV V US Total Standard EIA stock number 62% 84% 69% 97% 69% 74% "Head Room" PADD I - IV East of Rockies 148,594 12/9/2016 Source: Credit Suisse Research, EIA Total shell capacity (incl. idle capacity) Total operable shell capacity Total working capacity * Current inventories "Head Room" till working capacity is full Three week average build # of weeks till full PADD I - IV "East of Rockies" (excluding SPR): 592, , , , ,594-1,902 NA (*) Note: has been adjusted to account for oil in transit as well as a level of max fill at refineries below the EIA working capacity number 18

19 The Big Picture US Product Demand and Inventory US finished gasoline demand (Mb/d) US middle distillate demand (Mb/d) 10 5 year average year average US gasoline inventories (Mbs) US middle distillate inventories (Mbs) year average year average Source: Credit Suisse Research, EIA 19

20 The Big Picture QTD Spreads vs. CS Assumptions - WTI (Cushing) - WTS (Midland) QTD crude differentials are averaging.91/bbl,.62/bbl above Credit Suisse's 4Q16 forecast of.29/bbl - LLS - MAYA (Light - Heavy) QTD crude differentials are averaging $7.60/bbl,.90/bbl below Credit Suisse's 4Q16 forecast of $8.50/bbl - Rockies (WTI based) QTD refining margins are averaging $20.89/bbl, $1.39/bbl above Credit Suisse's 4Q16 forecast of $19.50/bbl - ANS - KERN QTD crude differentials are averaging $10.90/bbl,.22/bbl above Credit Suisse's 4Q16 forecast of $10.68/bbl - LLS - WCS QTD crude differentials are averaging $15.84/bbl,.84/bbl above Credit Suisse's 4Q16 forecast of $15.00/bbl - West Coast (ANS based) QTD refining margins are averaging $17.46/bbl, $1.21/bbl above Credit Suisse's 4Q16 forecast of $16.25/bbl - US Gulf Coast (LLS based) QTD refining margins are averaging $10.65/bbl, $3.15/bbl above Credit Suisse's 4Q16 forecast of $7.50/bbl - Asia (Dubai based) QTD refining margins are averaging $11.03/bbl, $1.73/bbl above Credit Suisse's 4Q16 forecast of $9.30/bbl - Northeast (Brent based) QTD refining margins are averaging $10.83/bbl, $3.83/bbl above Credit Suisse's 4Q16 forecast of $7.00/bbl - Mid - Continent (WTI based) QTD refining margins are averaging $10.43/bbl, $2.57/bbl below Credit Suisse's 4Q16 forecast of $13.00/bbl - LLS - MARS (Medium - Sour) QTD crude differentials are averaging $4.46/bbl,.04/bbl below Credit Suisse's 4Q16 forecast of $4.50/bbl Source: Credit Suisse Research, the BLOOMBERG PROFESSIONAL service, Platts 20

21 The International Scene

22 The International Scene Crude Spreads WTI Brent spread ($/b) $5 -$5 -$10 -$15 -$20 Brent Dubai ($/b) $8 $6 $4 $2 -$2 -$4 -$6 Brent Urals ($/b) $4.00 $3.50 $3.00 $2.50 $2.00 $1.50 $ Arab Light MARS ($/b) $60 $ $50 $4 $3 $40 $2 $30 $1 $20 $10 -$1 -$2 Source: Credit Suisse Research, the BLOOMBERG PROFESSIONAL service 22

23 The International Scene Cracks (incl. PADD I & III) US East Coast ($/b) (Brent based) $20 $15 $10 $5 NW Europe ($/b) (Brent based) $16 $14 $12 $10 $8 $6 $4 $2 SING ($/b) (Dubai Fateh based) $16 $14 $12 $10 $8 $ US Gulf Coast ($/b) (LLS based) $30 $25 $20 $15 $10 $5 -$5 Source: Credit Suisse Research, the BLOOMBERG PROFESSIONAL service 23

24 The International Scene CDU Outages Global reported CDU outages (Mb/d) World: ex-us, ex-fsu & ex-nwe reported CDU outages (Mb/d) NWE reported CDU outages (kb/d) 2, ,500 1, FSU reported CDU outages (kb/d) 2, ,000 1,500 1, Source: Credit Suisse Research, the BLOOMBERG PROFESSIONAL service 24

25 The International Scene Secondary Unit Outages Global reported FCC outages (Mb/d) Global reported reformer outages (Mb/d) Global reported hydrotreating outages (Mb/d) Global reported hydrocracking outages (Mb/d) Source: Credit Suisse Research, the BLOOMBERG PROFESSIONAL service 25

26 The International Scene Refinery Runs OECD crude runs according to the IEA (Mb/d) Original EU 16 refinery runs (Mb/d) yr ave 2015 IEA Forecast Yr Average D D Japan crude runs (Mb/d) yr ave Global crude runs according to the IEA (Mb/d) 82 5 yr ave 2015 IEA Forecast D 72 D Source: Credit Suisse Research, Euroil, PAJ, IEA 26

27 The International Scene Crude & Product Inventories Original EU 16 crude inventories (Mbs) OECD crude inventories (Mbs) 5 Yr Average ,300 5yr avg ,200 1, , D 900 D OECD gasoline inventories (Mbs) 450 5yr avg OECD middle distillate inventories (Mbs) yr avg D 400 D Source: Credit Suisse Research, Euroil, IEA 27

28 The International Scene European Product Inventories Original EU 16 gasoline inventories (Mbs) Original EU 16 middle distillate inventories (Mbs) Yr Average Yr Average D D Source: Credit Suisse Research, Euroil 28

29 The International Scene Chinese Runs & Product Flows China reported CDU outages (kb/d) 1, ,400 1,200 1, Chinese refinery crude runs (kb/d) ,500 11,000 10,500 10,000 9,500 9,000 8,500 D Chinese diesel net imports(+)/exports( ) (kb/d) D Chinese gasoline net imports(+)/exports( ) (kb/d) D Source: Credit Suisse Research, the BLOOMBERG PROFESSIONAL service, NBS 29

30 Oil Macro

31 Consumer Related Economic Indicators for the US US gasoline share of disposable income (%; monthly through September) US household debt (trillion $; quarterly through 2016 Q2) 4.4% 3.5% 2.6% 1.7% Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 Jan US personal savings ratio (%; monthly through September) Rising pay rolls in US (thousands of jobs; monthly through October) MoM, thous 12 MAV 196K thru Oct 3 MAV 176K thru Oct 4.0 Jan-13 Jan-14 Jan-15 Jan J-08 J-09 J-10 J-11 J-12 J-13 J-14 J-15 J-16 Source: Credit Suisse Research, Federal Reserve, BLS, BEA, Credit Suisse Economics Team 31

32 Oil Macro Seasonally Adjusted Demand Global oil demand growth (SA, 3mma of monthly data on a LN scale) J-08 J-09 J-10 J-11 J-12 J-13 J-14 J-15 J-16 J-17 Global oil demand data, mom (rhs) and yoy (lhs) 3 mma % change 5% 3 mma mom % change 3 mma yoy % change 4% 3% 2% 1% 0% -1% J-11 J-12 J-13 J-14 J-15 J % 2.0% 1.5% 1.0% 0.5% 0.0% -0.5% OECD oil demand growth (SA, 3mma of monthly data on a LN scale) J-08 J-09 J-10 J-11 J-12 J-13 J-14 J-15 J-16 J-17 OECD oil demand data, mom (rhs) and yoy (lhs) 3 mma % change 3% 2% 3 mma mom % change 3 mma yoy % change 1% 0% -1% -2% -3% F-11 F-12 F-13 F-14 F-15 F % 1.0% 0.5% 0.0% -0.5% -1.0% -1.5% Source: Credit Suisse Research, IEA, EIA, JODI, Country Data 32

33 Oil Macro Seasonally Adjusted Demand (cont d) Non-OECD oil demand growth (SA, 3mma of monthly data on a LN scale) 10.9 Non-OECD oil demand data, mom (rhs) and yoy (lhs) 3 mma % change 3 mma mom % change 3 mma yoy % change 8% 3.0% J-08 J-09 J-10 J-11 J-12 J-13 J-14 J-15 J-16 J-17 6% 4% 2% 0% J-11 J-12 J-13 J-14 J-15 J % 1.0% 0.0% -1.0% EM Asia ex-china (SA, 3mma of monthly data on a LN scale) 9.6 EM Asia ex-china oil demand data, mom (rhs) and yoy (lhs) 3 mma % change 8% 3 mma mom % change 3 mma yoy % change 6.0% J-08 J-09 J-10 J-11 J-12 J-13 J-14 J-15 J-16 J-17 6% 4% 2% 0% -2% J-11 J-12 J-13 J-14 J-15 J % 3.0% 1.5% 0.0% -1.5% Source: Credit Suisse Research, IEA, JODI, Country Data 33

34 Oil Macro Seasonally Adjusted Demand, US US (SA, 3mma of monthly data on a LN scale) J-08 J-09 J-10 J-11 J-12 J-13 J-14 J-15 J-16 J-17 J-18 US oil demand data, mom and yoy 3 mma % change 6% 3 mma mom % change 3 mma yoy % change 4% 2% 0% -2% -4% -6% A-11 A-12 A-13 A-14 A-15 A-16 US oil demand growth by product (annual averages in kb/d, yoy) 2012/ / / / E/ E/16E2018E/17E Others*** LPGs** Fuel oil Jet fuel Diesel* Gasoline Source: Credit Suisse Research, IEA, EIA 34

35 Oil Macro Seasonally Adjusted Demand, Europe & China OECD Europe (SA, 3mma of monthly data on a LN scale) OECD Europe oil demand data, mom and yoy 3 mma % change 6% 3 mma mom % change 3 mma yoy % change 3% 9.6 0% 9.5-3% 9.4 J-08 J-09 J-10 J-11 J-12 J-13 J-14 J-15 J-16 J-17 J-18-6% J-11 J-12 J-13 J-14 J-15 J-16 China demand (3mma kbd) 12,500 12,000 11,500 11,000 10,500 10,000 9,500 adjusted demand 9,000 3mth average 8,500 Poly. (3mth average) 8,000 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 China oil demand data, mom and yoy 3 mma % change China's oil product demand adjusted for gasoline and diesel inventory shifts YoY change kb/d ytd October* 2016 ytd October* October* 2016 ytd Gasoline 2,830 2,808 2,886 3,104 3, % 10.5% Kerosene % 13.8% Diesel 3,428 3,424 3,611 3,334 3, % -2.6% MD 4,020 4,023 4,197 4,015 4, % -0.2% Fuel oil % -4.4% LPG 1,095 1,071 1,119 1,349 1, % 25.9% Naphtha % 15.7% "Drive" 6,850 6,831 7,083 7,119 7, % 4.2% "Burn" 2,353 2,330 2,332 2,695 2, % 15.7% Total 9,203 9,161 9,415 9,814 9, % 7.1% * three month rolling average. "Drive" = gasoline + diesel + kerosene Source: Credit Suisse Research, IEA, JODI, NBS 35

36 Oil Macro Gasoline & Gas Oil Demand Trends Long history of gasoline and gas oil demand (Mb/d) Gasoline 18 Gas Oil 17 Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15 Gasoline demand momentum (levels lhs Mb/d; growth rhs kb/d) 25 YoY growth (rhs) 24 Gasoline Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan Gas Oil demand momentum (levels lhs Mb/d; growth rhs kb/d) 25 YoY growth (rhs) 24 Gas Oil Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan Data from our reported oil demand by product file cover ~85% of global demand Gas oil includes diesel and heating oil. Source: Credit Suisse Research, IEA, EIA, JODI, BP statistical review, Country Data 36

37 Oil Macro Global Demand YoY % Change 1,000 b/d Base by quarter ( ) by year ( ) "norm" by year in kb/d % Q15 4Q15 1Q16 2Q16 3Q16E 4Q16E 1Q17E 2Q17E 3Q17E 4Q17E E 2017E 2018E E 2017E 2018E Global 94, % 1.6% 2.0% 1.5% 1.2% 1.9% 1.5% 1.3% 1.6% 1.5% 1.6% 0.9% 2.0% 1.7% 1.5% 1.0% 1.4% OECD 46, % 0.0% 0.2% 0.9% 0.7% 1.7% 0.7% 0.7% 0.8% 0.8% 0.6% -0.6% 1.2% 0.9% 0.7% -0.4% -0.3% Emerging Markets 48, % 3.2% 3.9% 2.2% 1.6% 2.1% 2.3% 1.9% 2.4% 2.1% 2.6% 2.5% 2.8% 2.4% 2.1% 2.3% 3.1% OECD Americas 24, % -0.4% 0.2% -0.2% 0.1% 1.9% 1.2% 1.7% 1.7% 1.9% 1.9% 0.2% 1.7% 0.5% 1.6% 0.3% 0.3% Canada 2, % -0.5% -1.8% 1.8% 2.4% -1.8% -0.9% 1.2% 0.7% 0.9% -0.3% -2.0% 0.0% 0.2% 0.5% 0.1% 0.3% Mexico 2, % -0.2% 2.1% -1.5% -6.4% -5.3% 0.6% 4.1% 3.9% 4.5% -1.2% -2.4% -1.6% -2.9% 3.3% 1.3% -0.9% USA 19, % -0.5% 0.2% -0.3% 0.4% 3.1% 1.6% 1.5% 1.6% 1.9% 2.5% 0.8% 2.3% 0.8% 1.7% 0.2% 0.4% South America 6, % -3.6% -3.4% -2.8% -0.6% -2.7% 1.5% 0.5% -0.4% 1.1% 3.6% 2.2% -1.8% -2.3% 0.7% 1.7% 2.4% Brazil 3, % -7.1% -5.1% -3.7% 1.0% -3.6% 1.2% 0.9% -1.0% 2.1% 4.8% 4.7% -3.8% -2.8% 0.8% 2.2% 2.8% Argentina % 2.0% 3.1% 3.0% 3.0% 3.0% 1.4% 0.2% -0.3% 1.3% 5.0% -1.9% 4.9% 3.0% 0.6% 0.3% 3.2% Europe 14, % 1.6% 1.6% 2.7% 2.0% 1.2% 0.1% -0.5% -0.1% 0.0% -1.9% -0.8% 1.7% 1.9% -0.1% -0.9% -1.3% France 1, % -2.6% -0.6% -0.7% -1.2% 1.4% 2.3% -1.4% -1.5% -0.7% -1.3% -1.3% 0.0% -0.3% -0.3% -1.2% -1.5% Germany 2, % 0.2% 2.3% 3.7% -0.1% -0.6% -2.3% -0.2% 3.1% 1.7% 0.0% -2.5% -0.1% 1.3% 0.6% -0.3% -0.8% Italy 1, % 0.2% 2.2% 1.3% -1.0% -1.0% -0.3% -0.3% -0.3% -0.3% -6.6% 0.5% 0.0% 0.3% -0.3% -1.2% -3.8% UK 1, % 1.4% 3.2% 5.2% 3.2% 1.8% -0.8% -0.9% -0.9% -0.8% -2.0% -0.5% 1.7% 3.3% -0.8% -1.8% -1.0% Oth Europe 7, % 3.2% 1.5% 2.9% 3.5% 2.0% 0.6% -0.3% -0.5% -0.2% -1.7% -0.4% 3.0% 2.5% -0.1% -0.9% -1.1% FSU 4, % -1.9% 3.0% -1.0% -1.0% -1.0% 1.4% 1.9% 0.4% 0.8% -0.5% 1.7% -4.2% -0.1% 1.1% 1.0% 1.5% Mideast 9, % 4.8% 1.2% -2.9% -2.0% 1.5% 0.1% 0.2% 0.1% -0.9% 3.0% 3.5% 3.2% -0.6% -0.1% 3.7% 3.3% Saudi Arabia 3, % 7.1% 3.3% -5.6% -4.8% 1.0% -3.3% -1.8% -1.8% -4.0% 0.7% 6.5% 5.2% -1.8% -2.7% 5.0% 4.0% Iran 1, % -1.6% -0.2% -4.0% -0.9% 3.0% 2.8% 3.3% 4.3% 1.7% 6.9% -1.5% -3.2% -0.5% 3.0% 5.1% 0.9% Iraq % 5.4% 2.6% 3.4% -2.7% 2.0% 3.4% 3.1% 2.0% 3.5% 7.2% 2.6% 6.9% 1.1% 3.0% 5.1% 7.1% Africa 4, % 6.7% 5.6% 4.8% 4.2% 3.6% 2.7% 3.5% 4.2% 4.9% 7.4% 2.1% 5.4% 4.6% 3.8% 3.7% 3.0% Egypt % 9.9% 7.5% 7.2% 5.7% 2.0% -1.1% 4.7% -2.4% 3.7% 1.7% 6.7% 4.7% 5.5% 1.0% 0.4% 1.6% Asia-Pac 31, % 3.4% 4.4% 4.5% 3.0% 3.4% 2.5% 1.9% 3.0% 2.2% 1.9% 1.1% 3.5% 3.8% 2.4% 1.2% 2.7% China 11, % 3.1% 6.3% 6.9% 3.4% 5.6% 4.1% 2.4% 4.5% 2.7% 2.4% 2.6% 5.0% 5.5% 3.4% 2.4% 3.8% India 4, % 10.4% 11.9% 8.5% 6.0% 2.7% 2.7% 2.5% 4.3% 2.8% 0.6% 3.2% 8.0% 7.2% 3.1% 3.0% 4.7% Indonesia 1, % 0.7% 3.9% 4.0% 4.0% 3.0% 1.6% 2.3% 2.3% 5.4% 0.6% 2.0% -2.8% 3.7% 2.9% 0.7% 3.2% Japan 4, % -5.8% -5.8% -3.7% -2.7% 2.5% -0.1% -1.5% -2.0% -2.4% 0.7% -5.3% -3.4% -2.5% -1.5% -2.4% -0.9% South Korea 2, % 5.5% 5.6% 8.2% 7.3% 2.3% 0.1% 0.1% 0.2% 0.3% 0.5% 0.8% 2.5% 5.8% 0.2% -0.9% 1.2% Australia 1, % 0.4% -0.7% 0.8% -1.3% 1.0% 3.4% 2.2% 2.9% 2.4% 1.7% -0.2% 0.4% 0.0% 2.7% 1.9% 1.7% Thailand 1, % 6.8% 7.1% 4.4% 5.8% 2.0% 2.3% 3.6% 3.7% 4.3% 3.5% 0.8% 2.5% 4.8% 3.5% 0.8% 3.7% Taiwan 1, % 2.3% 1.6% -1.1% -1.0% 0.0% 3.9% 1.8% 4.6% 2.9% 2.7% 0.3% 1.5% -0.1% 3.5% 0.8% -0.7% Source: Credit Suisse Research, IEA, EIA, JODI 37

38 Oil Macro Global Supply Table Oil Supply in kbd Q16 2Q16 3Q16E 4Q16E 2016E 1Q17E 2Q17E 3Q17E 4Q17E 2017E 1Q18E 2Q18E 3Q18E 4Q18E 2018E 1Q16 2Q16 3Q16E 4Q16E 1Q17E 2Q17E 3Q17E 4Q17E E 2017E 2018E Global Total Oil 93,710 96,460 97,040 95,540 96,180 97,700 96,620 95,960 95,600 97,190 98,230 96,750 98,450 98,360 98,650 99,390 98,720 1, , ,820 2, ,970 Opec 14 all oil 37,770 38,960 38,790 38,650 39,060 39,960 39,990 38,800 38,840 40,130 40,370 40,460 40,860 40,790 40,930 40,850 41,760 1, , , ,190 1, ,300 Non Opec 53,270 54,830 55,600 54,050 54,340 55,070 53,890 54,560 53,980 54,350 55,180 53,600 54,980 54,790 55,010 55,860 54, ,350-1, , ,160 1, Non Opec EX us 40,420 40,960 41,860 40,420 41,010 41,840 40,410 41,420 40,560 40,590 41,120 40,000 40,910 40,410 40,270 40,600 39, , North America 21,000 21,900 21,950 21,080 21,470 21,270 21,440 21,060 21,200 21,600 21,910 21,450 21,900 22,100 22,510 23,080 22, , US 12,850 13,870 13,740 13,630 13,330 13,230 13,480 13,140 13,420 13,760 14,060 13,600 14,070 14,380 14,740 15,260 14, ,760 1, ,020 Canada 4,280 4,390 4,610 3,860 4,540 4,570 4,390 4,520 4,380 4,440 4,520 4,460 4,590 4,480 4,530 4,610 4, Mexico 2,790 2,590 2,530 2,480 2,450 2,400 2,470 2,370 2,330 2,300 2,240 2,310 2,200 2,170 2,140 2,110 2, South America 8,310 8,470 8,100 8,050 8,090 8,140 8,100 7,920 7,850 7,770 7,770 7,830 7,640 7,630 7,640 7,690 7, Venezuela 2,710 2,650 2,530 2,400 2,330 2,290 2,390 2,240 2,190 2,160 2,140 2,180 2,110 2,100 2,080 2,070 2, Brazil 2,760 3,010 2,870 2,970 3,170 3,260 3,070 3,140 3,100 3,090 3,140 3,120 3,060 3,090 3,150 3,260 3, Argentina Colombia 990 1, Europe 4,240 4,430 4,600 4,450 4,320 4,600 4,490 4,540 4,480 4,310 4,470 4,450 4,480 4,430 4,330 4,440 4, Norw ay 1,870 1,940 2,030 1,940 1,890 2,050 1,980 2,000 1,930 1,870 1,960 1,940 1,900 1,840 1,820 1,880 1, United Kingdom ,060 1, ,020 1,010 1,070 1, ,030 1,030 1,100 1,070 1,020 1,070 1, FSU 14,010 14,180 14,400 14,160 14,070 14,690 14,330 14,750 14,380 14,560 14,870 14,640 14,870 14,760 14,740 14,900 14, Russia 10,810 10,990 11,180 11,050 11,080 11,440 11,190 11,340 11,080 11,270 11,400 11,270 11,420 11,290 11,310 11,480 11, Kazakhstan 1,700 1,670 1,690 1,580 1,520 1,780 1,640 1,920 1,810 1,850 2,030 1,900 2,020 2,020 2,020 2,020 2, Azerbaijan Middle East 28,960 30,240 31,110 31,420 32,120 32,510 31,790 31,270 31,320 32,550 32,750 31,980 33,080 33,080 33,250 33,240 33,160 1, ,520 1, ,280 1, ,180 Saudi Arabia 11,740 12,050 12,170 12,010 12,380 12,400 12,240 11,890 11,880 12,670 12,770 12,310 13,030 13,030 13,030 13,030 13, Iran 3,710 3,830 4,280 4,800 4,840 5,010 4,730 4,950 4,990 5,040 5,090 5,020 5,190 5,190 5,190 5,190 5, , UAE 3,540 3,690 3,620 3,690 3,770 3,800 3,720 3,720 3,720 3,780 3,790 3,750 3,790 3,790 3,790 3,790 3, Kuw ait 3,070 3,070 3,160 3,030 3,200 3,150 3,130 2,950 2,950 3,250 3,280 3,110 3,140 3,130 3,310 3,320 3, Iraq 3,310 4,050 4,340 4,330 4,390 4,600 4,420 4,410 4,410 4,410 4,410 4,410 4,560 4,560 4,560 4,560 4, Qatar 2,030 2,010 2,020 2,010 1,980 2,020 2,010 1,990 1,990 2,010 2,010 2,000 1,980 1,980 1,990 1,990 1, Oman ,000 1,000 1,010 1,000 1, Africa 8,320 8,250 8,060 7,690 7,570 8,160 7,870 8,130 8,200 8,330 8,460 8,280 8,610 8,560 8,500 8,410 8, Nigeria 2,290 2,250 2,170 1,880 1,650 1,980 1,920 2,040 2,040 2,140 2,190 2,100 2,160 2,130 2,100 2,070 2, Algeria 1,560 1,550 1,530 1,580 1,580 1,610 1,580 1,510 1,540 1,540 1,570 1,540 1,490 1,510 1,530 1,520 1, Libya Angola 1,710 1,830 1,880 1,840 1,840 1,770 1,830 1,740 1,770 1,760 1,770 1,760 1,760 1,740 1,720 1,700 1, Sudan Asia 8,880 8,990 8,820 8,690 8,530 8,340 8,590 8,300 8,170 8,070 8,000 8,130 7,880 7,810 7,700 7,620 7, Indonesia China 4,220 4,300 4,160 4,040 3,930 3,730 3,960 3,620 3,530 3,490 3,470 3,530 3,330 3,250 3,200 3,150 3, India Global Crude Oil 76,110 78,220 78,380 76,660 77,430 78,750 77,810 77,130 76,500 77,850 78,520 77,500 78,780 78,530 78,730 79,180 78, , , ,260 2, ,310 Opec 14 crude oil 31,390 32,430 32,930 32,810 33,170 34,030 33,230 32,960 33,020 34,170 34,380 33,640 34,790 34,720 34,840 34,760 34,780 1, , , , ,140 Saudi Arabia 9,900 10,230 10,310 10,160 10,470 10,490 10,360 10,060 10,060 10,730 10,830 10,420 11,050 11,050 11,050 11,050 11, Iran 2,880 2,860 3,120 3,640 3,670 3,820 3,560 3,750 3,780 3,820 3,850 3,800 3,890 3,890 3,890 3,890 3, , Nigeria 1,770 1,750 1,710 1,410 1,200 1,530 1,460 1,600 1,600 1,700 1,750 1,660 1,730 1,700 1,680 1,650 1, US 8,760 9,420 9,170 8,850 8,660 8,540 8,800 8,490 8,510 8,660 8,840 8,630 8,820 8,960 9,150 9,590 9, , Source: Credit Suisse Research, IEA, EIA, JODI, Petrologistics 38

39 Oil Macro Global Supply ex-saudi Arabia Global production ex-saudi Arabia (Mb/d) Non-OPEC production ex US (rhs) vs. US production (lhs) US CAGR: = 1.73% Jul. '16 = 9.11% J-08 J-09 J-10 J-11 J-12 J-13 J-14 J-15 J-16 J J-04 J-06 J-08 J-10 J-12 J-14 J Non-Opec (ex-us) CAGR: = 0.61% Aug. '16 = 0.12% US production (crude + NGLs) kb/d (lhs), aggregate rig count (rhs) Rigs Production Europe production (crude + NGLs) kb/d (lhs), aggregate rig count (rhs) Rigs Production F-11 F-12 F-13 F-14 F-15 F F-11 F-12 F-13 F-14 F-15 F-16 0 Source: Credit Suisse Research, IEA, EIA, JODI, Petrologistics, Baker Hughes, Country Data 39

40 Oil Macro Regional Rig Counts & Production Latin America production (crude + NGLs) kb/d (lhs), aggregate rig count (rhs) 8100 Rigs Production Africa production (crude + NGLs) kb/d (lhs), aggregate rig count (rhs) Rigs Production F-11 F-12 F-13 F-14 F-15 F F-11 F-12 F-13 F-14 F-15 F-16 0 Asia Pacific production (crude + NGLs) kb/d (lhs), aggregate rig count (rhs) Rigs Production Middle East production (crude + NGLs) kb/d (lhs), aggregate rig count (rhs) Rigs Production F-11 F-12 F-13 F-14 F-15 F F-11 F-12 F-13 F-14 F-15 F Source: Credit Suisse Research, IEA, EIA, JODI, Petrologistics, Baker Hughes, Country Data 40

41 Oil Macro Declining Production Tracker OPEC and Non-OPEC trended decline tracker (Mb/d) Non-OPEC trended decline tracker (Mb/d) OPEC trended decline tracker (Mb/d) Note: Includes Russia, Mexico, Kazakhstan, Brazil, Canada, Azerbaijan, Norway, Colombia, Indonesia, US GoM, US conventional, UK, Egypt, Malaysia, Argentina, Thailand, Equitorial Guinea, Australia A look at production in those regions/countries most vulnerable to decline. 8.0 Note: Includes Angola, Nigeria, Algeria, Ecuador, Venezuela Source: Credit Suisse Research, IEA, EIA, Petrologistics, JODI, BP, Country Data 41

42 Oil Macro Declining Production Tracker (cont d) OPEC and Non-OPEC trended decline tracker (mom rhs, yoy lhs) Non-OPEC trended decline tracker (mom rhs, yoy lhs) 3% 2% 1% 3 mma mom % change 3 mma yoy % change 1.5% 1.0% 0.5% 3.0% 2.0% 3 mma mom % change 3 mma yoy % change 1.5% 1.0% 0% 0.0% 1.0% 0.5% -1% -0.5% 0.0% 0.0% -2% -1.0% -1.0% -0.5% -3% J-10 J-11 J-12 J-13 J-14 J-15 J % -2.0% J-10 J-11 J-12 J-13 J-14 J-15 J % OPEC trended decline tracker (mom rhs, yoy lhs) 4% 3 mma mom % change 3 mma yoy % change 2% 0% -2% -4% -6% -8% J-10 J-11 J-12 J-13 J-14 J-15 J % 0.5% 0.0% -0.5% -1.0% -1.5% -2.0% Note: Includes Russia, Mexico, Kazakhstan, Brazil, Canada, Azerbaijan, Norway, Colombia, Indonesia, US GoM, US conventional, UK, Egypt, Malaysia, Argentina, Thailand, Equitorial Guinea, Australia A look at production in those regions/countries most vulnerable to decline. Note: Includes Angola, Nigeria, Algeria, Ecuador, Venezuela Source: Credit Suisse Research, IEA, EIA, Petrologistics, JODI, BP, Country Data 42

43 Oil Macro Decline Details Brazil production has recovered (3 mma Mb/d; yoy rhs Mb/d) YoY (Mb/d) (rhs) 3.0 Brazil China is in decline (3 mma Mb/d; yoy rhs Mb/d) 4.4 YoY (Mb/d) (rhs) 4.3 China Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul Mexico has hit a 3 year low (3 mma Mb/d; yoy rhs Mb/d) YoY (Mb/d) (rhs) 2.8 Mexico Opec outside the Middle East is in yoy decline (3mma Mb/d; yoy rhs Mb/d) YoY (Mb/d) (rhs) Opec ex Middle East Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul Source: Credit Suisse Research, NBS, ANP, Pemex, ECB, Petrologistics 43

44 Saudi Arabia Productivity and Price Tracker Keeping an eye on the rig count and OSPs vs. benchmarks Saudi Arabia rig count (rhs) and total liquids production (kb/d; lhs) Saudi OSP US ASCI ($/b) 13,000 Saudi rigs Production Saudi 2016e Saudi OSP US 12, , ,000 9,000 Jun-12 Jun-13 Jun-14 Jun-15 Jun J-10 J-11 J-12 J-13 J-14 J-15 J-16 J-17 Saudi OSP Asia Oman/Dubai ($/b) 6 Saudi OSP Asia Saudi OSP NWE Weighted Average Brent ($/b) 2 Saudi OSP NWE J-10 J-11 J-12 J-13 J-14 J-15 J-16 J-17-8 J-08 J-09 J-10 J-11 J-12 J-13 J-14 J-15 J-16 J-17 Source: Credit Suisse Research, the BLOOMBERG PROFESSIONAL service, Baker Hughes, Petrologistics 44

45 Saudi Arabia Productivity and Price Tracker (cont d) Keeping an eye on the rig count and OSPs vs. benchmarks Saudi Arabia rig count (rhs) and crude production (kb/d; lhs) 11,000 Saudi rigs Production Saudi 2016e 10,500 10,000 9,500 9,000 8,500 8,000 Jun-12 Jun-13 Jun-14 Jun-15 Jun Saudi OSP US ASCI ($/b) (0.50) (1.00) range avg Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Saudi OSP Asia Oman/Dubai ($/b) range avg (1.00) (2.00) (3.00) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Saudi OSP NWE Weighted Average Brent ($/b) (1.00) (2.00) (3.00) (4.00) (5.00) range avg (6.00) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Source: Credit Suisse Research, the BLOOMBERG PROFESSIONAL service, Baker Hughes, Petrologistics 45

46 Saudi Arabia and Core GCC Crude Exports Keeping an eye on exports from the Mideast Crude exports from Saudi Arabia, Iraq, and Iran (Mb/d) 9 Saudi Trade Flows Iran Trade Flows (rhs) Iraq Trade Flows (rhs) Jan-15 May-15 Sep-15 Jan-16 May-16 Sep Aggregate crude exports from Saudi Arabia, Iraq, and Iran (Mb/d) wk ma Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Crude exports vs tanker flows from Saudi Arabia, Iraq, and Iran (4 wk avg, Mb/d) Tanker Flows Exports Source: Credit Suisse Research, the BLOOMBERG PROFESSIONAL service, Reuters, JODI, Petrologistics 46

47 Oil Macro Global Balances (Demand) Demand (Mb/d) Q1-'14 Q2-'14 Q3-'14 Q4-' Q1-'15 Q2-'15 Q3-'15 Q4-' Q1-'16 Q2-'16 Q3-'16 Q4-' Q1-'17 Q2-'17 Q3-'17 Q4-' Global yoy yoy (%) 0.9% 1.6% 1.1% 0.7% 0.8% 1.2% 0.9% 1.7% 2.2% 2.6% 1.6% 2.0% 2.0% 1.5% 1.2% 1.9% 1.7% 1.5% 1.3% 1.6% 1.5% 1.5% 1.0% OECD yoy (0.7) (0.7) (0.4) (0.1) (0.3) (0.0) (0.2) yoy (%) -1.4% 0.6% 0.2% -1.6% -0.8% -0.3% -0.6% 1.5% 1.5% 1.9% 0.0% 1.2% 0.2% 0.9% 0.7% 1.7% 0.9% 0.7% 0.7% 0.8% 0.8% 0.7% -0.4% Americas yoy (0.4) (0.2) (0.1) (0.0) yoy (%) -1.6% 1.9% 0.3% -0.7% 0.2% 0.9% 0.2% 2.2% 2.7% 2.3% -0.4% 1.7% 0.2% -0.2% 0.1% 1.9% 0.5% 1.2% 1.7% 1.7% 1.9% 1.6% 0.3% Europe yoy (0.4) (0.3) (0.0) (0.4) (0.0) (0.0) (0.1) (0.0) (0.1) (0.0) (0.0) (0.0) (0.1) yoy (%) -2.7% -1.8% -0.3% -2.5% -0.2% -0.2% -0.8% 2.7% 0.8% 1.9% 1.5% 1.7% 1.5% 2.7% 1.8% 1.1% 1.8% -0.1% -0.6% -0.2% -0.1% -0.2% -1.0% Asia Pacific yoy (0.2) (0.4) (0.3) (0.2) (0.2) (0.1) 0.1 (0.1) (0.1) (0.1) (0.0) (0.0) (0.1) (0.0) (0.1) yoy (%) 1.5% 0.8% 0.7% -3.0% -4.7% -3.9% -2.7% -2.2% -0.9% 0.7% -1.5% -1.0% -1.7% 0.9% 0.8% 2.2% 0.5% 0.4% -0.3% -0.5% -0.8% -0.3% -1.2% Non-OECD yoy yoy (%) 3.4% 2.6% 2.1% 3.0% 2.3% 2.6% 2.5% 2.0% 2.8% 3.3% 3.2% 2.8% 3.9% 2.2% 1.6% 2.1% 2.4% 2.3% 1.9% 2.4% 2.1% 2.1% 2.3% China yoy (0.1) yoy (%) 3.9% 2.4% -1.2% 2.8% 3.0% 5.5% 2.6% 5.4% 5.8% 5.7% 3.1% 5.0% 6.3% 6.9% 3.4% 5.6% 5.5% 4.1% 2.4% 4.5% 2.7% 3.4% 2.4% Other emerging Asia yoy yoy (%) 3.5% 2.1% 3.2% 4.4% 2.0% 0.4% 2.5% 2.9% 4.6% 5.8% 7.1% 5.1% 7.0% 4.3% 4.0% 2.1% 4.3% 2.5% 2.6% 3.7% 3.6% 3.1% 1.6% Mideast yoy (0.3) (0.2) 0.1 (0.1) (0.1) (0.0) 0.3 yoy (%) 3.4% 3.0% 3.4% 3.9% 2.0% 5.0% 3.5% 0.4% 3.4% 4.1% 4.8% 3.2% 1.2% -2.9% -2.0% 1.5% -0.6% 0.1% 0.2% 0.1% -0.9% -0.1% 3.7% South America yoy (0.0) (0.2) (0.2) (0.1) (0.2) (0.2) (0.0) (0.2) (0.2) (0.0) yoy (%) 4.2% 3.6% 2.8% 2.2% 2.4% 1.4% 2.2% 0.1% -0.7% -3.0% -3.6% -1.8% -3.4% -2.8% -0.6% -2.7% -2.3% 1.5% 0.5% -0.4% 1.1% 0.7% 1.7% FSU & EM Europe yoy 0.1 (0.0) (0.0) (0.2) (0.3) (0.1) (0.1) (0.2) 0.1 (0.0) (0.0) (0.0) yoy (%) 2.0% -1.0% 5.7% 0.6% -0.7% 0.5% 1.4% -4.9% -5.1% -2.7% -1.4% -3.5% 3.1% -0.3% -0.3% -0.3% 0.5% 1.6% 1.9% 0.5% 0.9% 1.2% 0.9% Africa yoy (0.0) yoy (%) 2.4% 7.4% -0.9% 2.2% 6.6% 1.1% 2.1% 5.0% 3.5% 6.3% 6.7% 5.4% 5.6% 4.8% 4.2% 3.6% 4.6% 2.7% 3.5% 4.2% 4.9% 3.8% 3.7% Source: Credit Suisse Research, IEA, JODI, EIA, NBP, ANP 47

48 Oil Macro Global Balances (Supply) Supply (Mb/d) Q1-'14 Q2-'14 Q3-'14 Q4-' Q1-'15 Q2-'15 Q3-'15 Q4-' Q1-'16 Q2-'16 Q3-'16 Q4-' Q1-'17 Q2-'17 Q3-'17 Q4-' Global yoy (1.0) (0.4) (1.1) yoy (%) 3% 1% 2% 1% 2% 3% 2% 3% 4% 3% 2% 3% 2% -1% 0% 1% 0% -1% 0% 1% 1% 0% 2% Non-Opec yoy (0.2) (1.4) (1.2) (1.0) (0.9) (1.1) (0.1) (0.0) 0.1 (0.3) 0.7 yoy (%) 2% 3% 4% 4% 4% 5% 4% 5% 3% 3% 1% 3% 0% -3% -2% -2% -2% -2% 0% 0% 0% -1% 1% North America yoy (0.0) (0.6) (0.6) (0.8) (0.5) (0.9) yoy (%) 8% 9% 10% 13% 10% 11% 11% 10% 4% 4% 1% 5% 0% -3% -3% -4% -2% -4% 1% 1% 3% 0% 5% of which US onshore crude + NGLs yoy (0.2) (0.5) (0.6) (0.7) (0.5) (0.6) (0.4) yoy (%) 17% 16% 16% 19% 18% 19% 18% 17% 11% 6% 1% 9% -2% -4% -5% -6% -4% -6% -3% 3% 7% 0% 11% FSU yoy (0.0) (0.0) (0.1) (0.0) (0.0) yoy (%) 0% 2% 0% 0% 0% -1% 0% 1% 2% 1% 1% 1% 1% 0% 0% 3% 1% 2% 1% 3% 1% 2% 1% of which Russia yoy (0.0) (0.0) yoy (%) 1% 1% 1% 0% 0% 0% 0% 1% 2% 2% 2% 2% 2% 1% 1% 3% 2% 1% 0% 2% 0% 1% 1% Asia yoy 0.2 (0.0) (0.1) (0.1) (0.0) 0.1 (0.0) (0.0) 0.1 (0.1) (0.4) (0.5) (0.7) (0.4) (0.6) (0.6) (0.5) (0.4) (0.5) (0.4) yoy (%) 2% 0% -1% -1% 0% 1% 0% 1% 2% 3% 0% 1% -2% -5% -7% -9% -6% -8% -8% -7% -5% -7% -5% South America yoy (0.0) (0.3) (0.2) (0.1) 0.0 (0.1) (0.2) (0.2) (0.1) (0.1) yoy (%) 0% 0% 4% 4% 6% 8% 5% 9% 7% 4% 0% 5% -5% -3% -1% 0% -2% 2% 0% -3% -4% -1% -1% Europe yoy (0.3) (0.2) 0.1 (0.1) (0.0) (0.0) (0.0) (0.1) (0.0) (0.0) yoy (%) -6% -4% 2% -1% 0% 3% 1% 1% 8% 6% 4% 5% 5% -1% 0% 2% 1% -1% 1% 0% -3% 0% -1% Africa yoy (0.1) (0.0) (0.0) (0.1) (0.0) (0.1) (0.2) (0.1) 0.0 (0.1) yoy (%) 2% 4% 4% 3% 2% -3% 2% 0% -1% -1% -3% -1% -5% -9% -3% 1% -4% 5% 10% 6% 6% 7% 0% Mideast yoy (0.1) (0.0) (0.1) (0.1) (0.1) (0.1) (0.1) (0.0) (0.0) (0.1) 0.0 (0.0) (0.1) (0.0) (0.0) (0.2) (0.2) (0.2) (0.2) (0.2) (0.0) yoy (%) -3% -1% -6% -6% -4% -8% -6% 0% -1% -4% 0% -1% -5% -1% 2% 2% -1% -13% -13% -12% -12% -12% 0% Opec yoy 1.5 (1.0) (0.3) (1.0) (0.5) 0.5 (0.3) yoy (%) 4% -3% -1% -3% -1% 1% -1% 1% 4% 4% 4% 3% 4% 1% 2% 4% 3% 0% 1% 3% 1% 1% 3% Opec crude oil yoy 1.3 (1.1) (0.4) (1.1) (0.5) 0.3 (0.4) yoy (%) 4% -3% -1% -3% -2% 1% -1% 1% 5% 4% 4% 3% 4% 0% 2% 4% 2% 0% 1% 3% 1% 1% 3% of which Saudi Arabia yoy 0.5 (0.1) (0.4) (0.3) (0.3) (0.3) (0.1) yoy (%) 5% -1% 6% 1% -4% -3% 0% 0% 5% 3% 5% 3% 3% -3% 2% 3% 1% -2% -1% 2% 3% 1% 6% Opec non-crude yoy yoy (%) 4% 0% 2% 1% 1% 2% 1% 0% 3% 3% 3% 2% 6% 3% 3% 3% 3% 0% 0% 1% 2% 1% 2% Processing Gains Source: Credit Suisse Research, IEA, Petrologistics, EIA, NBP, ANP 48

49 Oil Macro Global Balances (Inventories) Balance Q1-'14 Q2-'14 Q3-'14 Q4-' Q1-'15 Q2-'15 Q3-'15 Q4-' Q1-'16 Q2-'16 Q3-'16 Q4-' Q1-'17 Q2-'17 Q3-'17 Q4-' implied inventory change (Mb/d) 0.7 (0.2) (0.0) (0.7) (1.1) (1.2) (1.2) (0.8) (1.1) (0.1) reported inventory change (Mb/d) 0.3 (0.0) (0.6) OECD 0.2 (0.1) (0.2) (0.0) non-oecd oil at sea (0.0) 0.0 (0.1) (0.4) (0.0) call on Opec & stocks yoy (0.6) (0.2) (1.0) (1.7) (1.5) (1.4) (1.4) (0.9) yoy (%) -2% -1% -3% -5% -4% -4% -4% -3% 0% 2% 3% 1% 6% 9% 7% 8% 7% 8% 4% 5% 4% 5% 0% call on Saudi & stocks yoy (1.4) 0.7 (0.0) (0.4) (1.3) (2.0) (0.9) (1.2) (0.9) (0.2) 0.1 (0.5) (0.3) yoy (%) -13% 8% 0% -5% -12% -18% -9% -13% -10% -2% 1% -6% 10% 27% 18% 17% 18% 25% 10% 7% 12% 13% -3% call on US onshore crude + NGLs & stocks yoy (0.8) (0.2) 0.1 (0.2) yoy (%) -10% 30% 8% 13% 7% 0% 7% 5% -3% 1% -2% 0% 3% 22% 9% 5% 10% 20% 7% 8% 16% 13% 2% Inventories Q1-'14 Q2-'14 Q3-'14 Q4-' Q1-'15 Q2-'15 Q3-'15 Q4-' Q1-'16 Q2-'16 Q3-'16 Q4-' Q1-'17 Q2-'17 Q3-'17 Q4-' reported inventory (billion bls) OECD non-oecd oil at sea days demand cover (excl. China SPR) yoy (0.4) (0.0) (0.2) (0.6) (0.6) (1.7) (3.1) (4.5) (4.4) (4.4) (1.9) yoy (%) -1% 0% 1% 2% 3% 3% 3% 5% 5% 6% 8% 8% 4% 3% 0% -1% -1% -3% -6% -8% -8% -8% -4% OECD yoy 1.4 (1.0) (0.4) yoy (%) 2% -2% -1% 2% 3% 5% 5% 8% 7% 10% 11% 11% 7% 5% 1% non-oecd yoy (1.9) (0.4) (1.2) yoy (%) -4% 3% 3% 3% 3% 2% 2% 2% 4% 3% 5% 5% 1% -1% -3% Demand (3 mma) Supply 92 Jan-14 Jan-15 Jan-16 Jan-17 approx impact of Opec deal 3.0 implied inventory change 3 mma 2.5 reported inventory change 3 mma (0.5) (1.0) (1.5) (2.0) Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Source: Credit Suisse Research, IEA, JODI, EIA, NBP, ANP 49

50 Oil Macro Global Inventory Data million barrels YoY diff to avg IEA+JODI+China Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Aug-16 Sep-16 Aug-16 Sep-16 Reported Commercial Oil Inventories + China SPR 5,707 5,742 5,763 5,792 5,838 5,866 5,906 5,932 5,956 6,030 6,022 6,096 6,075 6, ,088 1,063 China SPR Reported Commercial Oil Inventories 5,497 5,520 5,542 5,570 5,592 5,635 5,648 5,653 5,651 5,706 5,699 5,757 5,725 5, crude 2,991 3,004 3,089 3,075 3,107 3,092 3,089 3,107 3,098 3,125 3,127 3,109 3,096 3, products 2,506 2,516 2,453 2,496 2,485 2,543 2,559 2,546 2,552 2,581 2,572 2,649 2,629 2, OECD 2,935 2,942 2,944 2,961 2,974 3,010 3,010 3,004 3,015 3,039 3,042 3,091 3,072 3, crude 1,126 1,122 1,159 1,148 1,172 1,173 1,190 1,200 1,203 1,211 1,205 1,202 1,177 1, products 1,809 1,820 1,785 1,813 1,802 1,837 1,820 1,804 1,811 1,828 1,836 1,889 1,896 1, North America 1,522 1,530 1,534 1,552 1,550 1,572 1,568 1,578 1,588 1,590 1,598 1,625 1,622 1, crude products Europe ,014 1,020 1,005 1,006 1,015 1,006 1,024 1, crude products Asia crude products Non-OECD 1,453 1,457 1,439 1,447 1,453 1,453 1,461 1,451 1,442 1,453 1,444 1,453 1,448 1, crude products EM Asia crude products Middle East crude products Latin America crude products Africa crude products Europe crude products FSU crude products Independent Storage Singapore products ARA crude ARA products Saldana Bay Oil at Sea ,005 1,010 1,003 1,009 1, Oil in Transit Floating Storage Source: Credit Suisse Research, IEA, JODI, EIA, Country Data 50

51 Oil Macro Global Inventory Data (cont d) IEA+JODI+China YoY diff to avg million barrels Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Aug-16 Sep-16 Aug-16 Sep-16 Reported Commercial Oil Inventories + China SPR 5,707 5,742 5,763 5,792 5,838 5,866 5,906 5,932 5,956 6,030 6,022 6,096 6,075 6, ,088 1,063 China SPR Reported Commercial Oil Inventories 5,497 5,520 5,542 5,570 5,592 5,635 5,648 5,653 5,651 5,706 5,699 5,757 5,725 5, crude 2,991 3,004 3,089 3,075 3,107 3,092 3,089 3,107 3,098 3,125 3,127 3,109 3,096 3, products 2,506 2,516 2,453 2,496 2,485 2,543 2,559 2,546 2,552 2,581 2,572 2,649 2,629 2, North America 1,522 1,530 1,534 1,552 1,550 1,572 1,568 1,578 1,588 1,590 1,598 1,625 1,622 1, crude products Europe 1,039 1,046 1,049 1,059 1,067 1,089 1,097 1,078 1,082 1,093 1,085 1,102 1,086 1, crude products Asia 1,067 1,057 1,025 1,018 1,030 1,032 1,040 1,034 1,033 1,052 1,045 1,049 1,048 1, crude (ex China SPR) products Middle East crude products Latin America crude products Africa crude products Independent Storage Singapore products ARA crude ARA Products Saldana Bay Oil at Sea ,005 1,010 1,003 1,009 1, Oil in Transit Floating Storage days of cover YoY diff to avg Demand Cover Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Aug-16 Sep-16 Aug-16 Sep-16 Reported Commercial Oil Inventories + China SPR Reported Commercial Oil Inventories OECD North America Europe Asia Non-OECD EM Asia Middle East Crude Production Cover Latin America Africa Source: Credit Suisse Research, IEA, JODI, EIA, Country Data 51

52 US Gulf Coast (USGC)

53 USGC Crude Spreads Brent LLS ($/b) $10 $8 $6 $4 $2 -$2 -$4 -$6 LLS Houston ($/b) $120 $100 $80 $60 $40 $20 J-13 N-13 M-14 J-14 N-14 M-15 J-15 N-15 M-16 J-16 Houston WTI ($/b) LLS MARS ($/b) $15 $10 $5 Houston WTI ($/b) -$5 J-13 N-13 M-14 J-14 N-14 M-15 J-15 N-15 M-16 J-16 $8 $7 $6 $5 $4 $3 $2 $1 Source: Credit Suisse Research, the BLOOMBERG PROFESSIONAL service 53

54 USGC Crude Spreads (cont d) LLS MAYA ($/b) RFO LLS ($/b) $25 $20 -$ $15 -$10 $10 -$15 $5 -$20 -$25 Brent ASCI ($/b) $ $14 $12 $10 $8 $6 $4 $2 Arab Light MARS ($/b) $ $4 $3 $2 $1 -$1 -$2 Source: Credit Suisse Research, the BLOOMBERG PROFESSIONAL service 54

55 USGC Crack Spreads and Refining Margins US Gulf Coast gasoline cracks ($/b) (LLS based) $40 $30 $20 $10 US Gulf Coast distillate cracks ($/b) (LLS based) $25 $20 $15 $10 $5 -$10 US Gulf Coast gasoline cracks ($/b) (WTI based) $40 $30 $20 $10 -$10 US Gulf Coast distillate cracks ($/b) (WTI based) $35 $30 $25 $20 $15 $10 $5 Source: Credit Suisse Research, the BLOOMBERG PROFESSIONAL service 55

56 USGC Crack Spreads and Refining Margins (cont d) US Gulf Coast ($/b) (WTI based) $35 $30 $25 $20 $15 $10 $5 US Gulf Coast ($/b) (MAYA based) $35 $30 $25 $20 $15 $10 $5 US Gulf Coast ($/b) (LLS based) $30 $25 $20 $15 $10 $5 -$5 VGO cracks vs LLS Gulf Coast crack ($/b) $30 VGO crack LLS crack $20 $10 -$10 -$20 J-14 J-15 J-16 Source: Credit Suisse Research, the BLOOMBERG PROFESSIONAL service 56

57 USGC PADD III Refinery Runs PADD III crude runs (Mb/d) PADD III crude inventories (Mbs) year average year average PADD III utilization (% of total refinery operable capacity) 100% 4 year average % PADD III CDU maintenance forecast (kb/d of capacity offline) yr ave frcst 2016 actuals % % 0 Source: Credit Suisse Research, EIA 57

58 USGC PADD III Inventories and Crude Flows PADD III crude inventories (Mbs) PADD III crude days of forward cover year average year average PADD III domestic crude production, monthly data (Mb/d) 5 year average exit rate PADD III crude oil imports (Mb/d) 8 5 year average D 2 Source: Credit Suisse Research, EIA 58

59 USGC PADD III Storage Capacity and Detail PADD III crude inventories and forecast (Mbs) J-10 J-11 J-12 J-13 J-14 J-15 J-16 August-16 PADD III Working crude storage capacity (thousands of barrels) Total Shell capacity (incl. idle capacity) Total operable shell capacity Total working capacity Current inventories PADD III refineries 93,842 91,650 59,573 47,906 Texas Inland 1,793 Texas Gulf Coast 27,266 La. Gulf Coast 17,281 N. La., Ark 1,254 New Mexico 312 Tank farms (excluding SPR) 269, , , ,568 12/9/2016 PADD III Working crude storage capacity (thousands of barrels) Total Shell capacity (incl. idle capacity) Total operable shell capacity Total working capacity * Current inventories "Head Room" till working capacity is full # of weeks till full Three week average build PADD III (excluding SPR): 363, , , , ,249-2,491 NA (*) Note: has been adjusted to account for oil in transit as well as a level of max fill at refineries below the EIA working capacity number Source: Credit Suisse Research, EIA 59

60 Permian

61 Permian Crude Spreads WTI (Cushing) WTI (Midland) ($/b) $25 $20 $15 $10 $5 -$5 WTI (Cushing) WTS (Midland) ($/b) $20 $15 $10 $5 -$5 Permian basin crude production (kb/d) Permian Region 2,500 2,000 1,500 1, J-07 J-08 J-09 J-10 J-11 J-12 J-13 J-14 J-15 J-16 Permian rig count Permian F-11 F-12 F-13 F-14 F-15 F-16 Source: Credit Suisse Research, the BLOOMBERG PROFESSIONAL service, EIA, Baker Hughes 61

62 Permian Pipeline Map Permian pipeline map Source: Pioneer Natural Resources 62

63 Mid - Continent

64 Mid Continent Crude Spreads WTI LLS ($/b) $2 -$2 -$4 -$6 -$8 -$10 -$12 -$14 WCS Canadian Heavy LLS ($/b) -$5 -$10 -$15 -$20 -$25 -$30 -$35 Syncrude LLS ($/b) $6 $4 $2 -$2 -$4 -$6 -$8 -$10 -$12 Bakken (Clearbrook) LLS ($/b) -$2 -$4 -$6 -$8 -$10 -$12 -$14 -$16 Source: Credit Suisse Research, the BLOOMBERG PROFESSIONAL service 64

65 Mid Continent Crack Spreads and Product Differentials US Mid-Continent Cushing ($/b) (WTI based) US Rockies ($/b) (WTI based) $ $60 $50 $50 $40 $40 $30 $30 $20 $20 $10 $10 Mid-Con USGC gasoline price ($/b) $40 $30 $20 $10 -$10 -$20 Mid-Con USGC distillate price ($/b) $30 $25 $20 $15 $10 $5 -$5 -$10 Source: Credit Suisse Research, the BLOOMBERG PROFESSIONAL service 65

66 Mid Continent PADD II Refinery Runs PADD II crude runs (Mb/d) 4 5 year average PADD II crude inventories (Mbs) year average PADD II utilization (% of total refinery operable capacity) 110% 4 year average % 90% 80% PADD II CDU maintenance forecast (kb/d of capacity offline) yr ave frcst 2016 actuals % 0 Source: Credit Suisse Research, EIA 66

67 Mid Continent PADD IV Refinery Runs PADD IV crude runs (Mb/d) year average PADD IV inventories (Mbs) year average PADD IV utilization (% of total refinery operable capacity) 110% 4 year average % 90% 80% 70% 60% PADD IV CDU maintenance forecast (kb/d of capacity offline) yr ave frcst 2016 actuals Source: Credit Suisse Research, EIA 67

68 Mid Continent PADD II & IV Inventories and Crude Flows PADD II crude inventories (Mbs) PADD IV inventories (Mbs) year average year average PADD II + IV domestic crude production, monthly data (Mb/d) year average exit rate PADD II + IV crude oil imports (Mb/d) year average D 1.0 Source: Credit Suisse Research, EIA 68

69 Mid Continent PADD II Product Stocks/Storage Capacity PADD II total gasoline inventories (Mbs) 65 5 year average PADD II total middle distillate inventories (Mbs) 40 5 year average August-16 PADD II Working crude storage capacity (thousands of barrels) Total Shell capacity (incl. idle capacity) Total operable shell capacity Total working capacity Current inventories PADD II refineries 25,410 24,677 18,508 14,544 Tank farms (excluding SPR) 153, , , ,087 Cushing Ok 88,010 87,685 73,014 64,351 12/9/2016 PADD II Working crude storage capacity (thousands of barrels) Total Shell capacity (incl. idle capacity) Total operable shell capacity Total working capacity * Current inventories "Head Room" till working capacity is full # of weeks till full Three week average build PADD II (excluding SPR): 179, , , ,298 29,071 1, Cushing Ok 88,010 87,685 73,014 66,508 6,506 2,475 3 (*) Note: has been adjusted to account for oil in transit as well as a level of max fill at refineries below the EIA working capacity number Source: Credit Suisse Research, EIA 69

70 West Coast

71 West Coast Crude & Crack Spreads ANS KERN ($/b) US West Coast ($/b) (ANS based) $25 $70 $20 $15 $60 $50 $40 $10 $5 $30 $20 $10 Source: Credit Suisse Research, the BLOOMBERG PROFESSIONAL service 71

72 West Coast PADD V Refinery Runs PADD V crude runs (Mb/d) PADD V crude inventories (Mbs) 3 5 year average year average PADD V utilization (% of total refinery operable capacity) 100% 4 year average % 80% 70% 60% PADD V CDU maintenance forecast (kb/d of capacity offline) yr ave frcst 2016 actuals Source: Credit Suisse Research, EIA 72

73 West Coast PADD V Inventories and Crude Flows PADD V crude inventories (Mbs) PADD V crude days of forward cover 65 5 year average year average PADD V domestic crude production, monthly data (Mb/d) year average exit rate 2016 PADD V crude oil imports (Mb/d) year average D 0.0 Source: Credit Suisse Research, EIA 73

74 West Coast Gasoline Sales and Usage PADD V gasoline inventories (Mbs) 40 5 year average PADD V diesel inventories (Mbs) 17 5 year average PADD 5 finished motor gasoline demand (kb/d) SA T 13 Trend J-95 J-97 J-99 J-01 J-03 J-05 J-07 J-09 J-11 J-13 J-15 California Vehicle Miles Traveled (VMT, in billions) T 13 trend J-95 J-97 J-99 J-01 J-03 J-05 J-07 J-09 J-11 J-13 J-15 Source: Credit Suisse Research, EIA, California Department of Transportation 74

75 West Coast PADD V Storage Capacity and Detail August-16 PADD V Working crude storage capacity (thousands of barrels) Total Shell capacity (incl. idle capacity) Total operable shell capacity Total working capacity Current inventories PADD V refineries 43,125 40,924 30,693 23,061 Tank farms (excluding SPR) 35,491 34,423 28,117 24,272 12/9/2016 PADD V Working crude storage capacity (thousands of barrels) Total Shell capacity (incl. idle capacity) Total operable shell capacity Total working capacity * Current inventories "Head Room" till working capacity is full # of weeks till full Three week average build PADD V (excluding SPR): 78,616 75,347 73,383 50,534 22, NA (*) Note: has been adjusted to account for oil in transit as well as a level of max fill at refineries below the EIA working capacity number Source: Credit Suisse Research, EIA 75

76 East Coast

77 East Coast Product Cracks & Gasoline Demand US East Coast ($/b) (Brent based) $20 $15 $10 $5 US East Coast gasoline cracks ($/b) (Brent based) $30 $25 $20 $15 US East Coast diesel cracks ($/b) (Brent based) $40 $35 $30 $25 $20 $15 $10 $5 PADD I gasoline demand, monthly data (kb/d) 3,600 5 year average ,400 3,200 $10 $5 3,000 2,800 D Source: Credit Suisse Research, the BLOOMBERG PROFESSIONAL service, Platts, EIA 77

78 East Coast Structural Changes in the North East East Coast Refining Capacity vs. Regional Demand (kb/d, unless otherwise noted) Capacity % of Capacity Demand Capacity as a % of Demand Capacity % of Capacity Philadelphia % % St. John % % Bayway % % Quebec City % % Trainer % % Delaware City % % Paulsboro % % United % % Ergon % % Hovensa % 0 0.0% Aruba % 0 0.0% Marcus Hook % 0 0.0% Earle Point % 0 0.0% Montreal % 0 0.0% Yorktown % 0 0.0% Demand Capacity as a % of Demand Total* % % % % (*) Note: Numbers include estimates for Quebec and the Canadian Maritime Provinces 2008 Today Source: Credit Suisse Research, EIA, CAPP, Company Data 78

79 Technicals

80 Other Technical Indicators Brent futures Managed Money positions (thousands of contracts) 600 Long MM Contracts Shorts J-13M-13S-13 J-14M-14S-14 J-15M-15S-15 J-16 M-16S-16 WTI futures Managed Money positions (thousands of contracts) 400 Long MM Contracts Shorts J-13M-13S-13 J-14M-14S-14 J-15M-15S-15 J-16 M-16S-16 Net length for Managed Money positions over the past year Brent MM WTI MM Current Hi Low Average Total Crude MM (contracts) Open interest for all categories over the past year (thousands of contracts) Brent OI WTI OI Total Crude OI (contracts) Current Hi Low Average Source: Credit Suisse Research, the BLOOMBERG PROFESSIONAL service, CFTC, ICE 80

81 Other Technical Indicators - Continued Brent price technicals (lhs), trading volume & OI (rhs) WTI price technicals (lhs), trading volume & OI (rhs) OI (futures) Volume (futures) Brent Price 63 day mav 200 day mav 6000 OI (futures) Volume (futures) WTI Price 63 day mav 200 day mav S-14 D-14 M-15 J-15 S-15 D-15 M-16 J-16 S S-14 D-14 M-15 J-15 S-15 D-15 M-16 J-16 S-16 0 Brent February 2017 options positioning by strike price 30 WTI February 2017 options positioning by strike price Calls Puts -20 $6 $19 $31 $44 $56 $69 $81 $94 $106 $119 $ Calls Puts -20 $4 $17 $29 $42 $54 $67 $79 $92 $104 $117 $129 Source: Credit Suisse Research, the BLOOMBERG PROFESSIONAL service, CFTC, ICE 81

82 Other Technical Indicators - Continued Brent futures curve open interest ($/b) WTI futures curve open interest ($/b) $70 $70 $60 $60 $50 $40 12/2/ /9/2016 $50 $40 12/2/ /9/2016 $30 $30 $20 J-16 A-16 M-17 S-17 A-18 O-18 M-19 D-19 J-20 J-21 $20 J-16 A-16 M-17 S-17 A-18 O-18 M-19 D-19 J-20 J-21 J-21 F-22 Source: Credit Suisse Research, the BLOOMBERG PROFESSIONAL service, CFTC, ICE 82

83 NGLs

84 NGL Prices & Fractionation Spreads Quarterly gross processing spread (ave. of weekly spreads) ($/gal.) Q16 2Q16 3Q16 4Q16 TD Weekly gross processing spread ($/gal.) $1.60 Average Spread since 1992 =.32 $ J-92 O-94 J-97 A-00 J-03 O-05 J-08 A-11 J-14 N-16 Components of NGL fractionation spread ($/MMBtu) NGL barrel economics (%) Ethane Propane Butane Isobutane Natural Gasoline $14 Ethane Contr. 100% Natural Propane Contr. $10 Normal Butane Contr. 80% Gasoline, 24% Isobutane Contr. Isobutane, $6 Natural Gasoline Contr. 60% 15% Butane, 13% $2 -$2 Avg NGL Frac Spread Avg NGL Frac Spd $6 05: ~$1.59/MMBtu Current: ~$7.32/MMBtu J-00 O-01 J-03 A-05 J-07 O-08 J-10 A-12 J-14 O-15 40% 20% 0% Ethane, 14% NGL Barrel Economics Propane, 34% Source: Credit Suisse Research, the BLOOMBERG PROFESSIONAL service, Platts 84

85 NGL Arb. & Chemicals Prices VLGC spot tanker day rates (thousands of $) F. East Chemicals Prices ($/MT) $150 $125 $100 $75 $50 $25 $ yr average $17.50 $15.00 $12.50 $10.00 F. East Polypropylene $7.50 F. East Linear Low Density Polyethylene USGC to Asia NGL arb. ($/gal.) $2.00 USGC to Europe NGL arb. ($/gal.) $2.00 $1.50 $1.50 $ $- US propane ($/gal.) Asia net-back ($/gal.) Hypothetical Asia net-back post PCE ($/gal.) J-11 J-12 J-13 J-14 J-15 J-16 $ $- US propane ($/gal.) Europe net-back ($/gal.) J-11 J-12 J-13 J-14 J-15 J-16 Source: Credit Suisse Research, the BLOOMBERG PROFESSIONAL service, Platts, Clarksons 85

86 Octane Monitor Aromatics and alky. should flag any imminent octane squeeze Butane RBOB ($/gal.) Alky FOB 87 unleaded waterborne gasoline ($/gal.) $1.00 J A J O $ $ Toluene LLS (RHS, $/gal.) vs. premium gasoline RBOB (LHS $/gal.) BTX aromatics ($/gal.) $ $6.50 Benzene Toluene Xylenes $1.50 $ Toluene - LLS Premium-RBOB spread $5.50 $4.50 $3.50 $2.50 $ Source: Credit Suisse Research, the BLOOMBERG PROFESSIONAL service, Platts 86

87 Other

88 Other Wholesale & Retail Margins, LPGs & VMT Rack margins, spread vs. Gulf Coast price ($/gal) Tampa Jacksonville Atlanta (Athens) Chicago (East Chicago) -.50 M-13J-13S-13D-13M-14J-14S-14D-14M-15J-15S-15D-15M-16J-16S-16 US LPG Margins WTI ($/b) $50 Ethane Propane Normal Butane $25 Isobutane Natural Gasoline $- $(25) $(50) $(75) $(100) F-11 F-12 F-13 F-14 F-15 F-16 Weekly US retail composite margins (c/gal).60 5 yr avg Vehicle Miles Traveled (LHS) vs. US gasoline demand (kb/d) VMT US MoGas demand (kb/d) J-00 J-02 J-04 J-06 J-08 J-10 J-12 J-14 J Source: Credit Suisse Research, the BLOOMBERG PROFESSIONAL service, EIA, DoT, U. Michigan TRI 88

89 Other Fuel Efficiency & Tanker Fixtures Apparent fuel efficiency (seasonally adjusted VMT/gasoline demand) Apparent fuel efficiency J-02 J-04 J-06 J-08 J-10 J-12 J-14 J-16 Total tanker fixture volumes into the US (Mb/d) Total tanker fixture volumes into the US Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Average sales-weighted fuel-economy rating of new car sales Sales weighted MPG J-08 J-09 J-10 J-11 J-12 J-13 J-14 J-15 J-16 Outgoing tanker fixtures from the Arabian Gulf Total fixtures out of AG (CS estmates) Source: Credit Suisse Research, the BLOOMBERG PROFESSIONAL service, EIA, DoT, U. Michigan TRI, MAREX, Clarksons 89

90 East Coast EQuivalent Breakeven margin $/bbl Other Our Global Refining Cost Curve The US is at the bottom left Throughput Cost Curve 2017 Throughput Cost Curve ,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90, ,000 Cumulative Throughput Source: Credit Suisse Research, the BLOOMBERG PROFESSIONAL service, EIA, OGJ 90

91 Disclosures