COMPARATIVE ANALYSIS OF MONTHLY REPORTS ON THE OIL MARKET

Similar documents
COMPARATIVE ANALYSIS OF MONTHLY REPORTS ON THE OIL MARKET

COMPARATIVE ANALYSIS OF MONTHLY REPORTS ON THE OIL MARKET

COMPARATIVE ANALYSIS OF MONTHLY REPORTS ON THE OIL MARKET

MacroVoices Oil Discussion: OPEC Can t Fix The Problem of Low Oil Prices

OPEC extends oil output cut through March 2018

Oil Markets: Where next?

The Oil Supply Outlook in the New Oil Price Environment: The Long and Short Term Investment Cycles

Oil price. Laura Lungarini

Looking Ahead on Oil & Gas

Markets Have De-Valued Oil Prices: How Long Will It Last?

Oil market update OPEC key to decide market direction

Auscap Long Short Australian Equities Fund Newsletter August 2015

Saudi Economy: still shining

The Lies We ve Been Told

Saudi Chartbook. Summary. December 2014

Market Bulletin November 17, 2014

Recent oil market trends and future drivers

OIL MARKETS IN 2019: A CHALLENGING BALANCING ACT

LIGHT SWEET CRUDE OIL. Short term Update

FY2018, FY2019 Economic Outlook - The Japanese economy is continuing to follow a recovery track -

Brent spot Brent 20-day rolling average WTI spot WTI 20 day rolling average. USD per barrel. USD per barrel. WTI - Brent Arb

Market Watch Presentation

Key Priorities and Challenges for Canadian Oil

The Long Journey to Recovery. Russia Economic Report April 2016 Edition No. 35

Chart 1. U.S. Personal Saving Rate and Household Debt (consu plus mortgage) as a % of Disposable Personal Incom

Managing Volatility in Oil and Gas Revenues

News & Development Rising Channel Bollinger Band Overall, we maintain our bullish view in MCX Crude Oil for the next one month.

BBVA Research U.S. Economic Outlook January 2019 / 1. U.S. Economic Outlook January 2019

The real change in private inventories added 0.22 percentage points to the second quarter GDP growth, after subtracting 0.65% in the first quarter.

Eurozone Economic Watch

Economic Growth Expected to Slow and Housing to Stabilize in 2019

Flash Note Oil price. A market tilted towards oversupply. A widely expected agreement between OPEC and Russia. Unabated growth in global demand

Russia: Macro Outlook for 2019

The current US sanctions and foreign policy environment: Implications for global energy firms

Russia Monthly Economic Developments February 2019

Russia Monthly Economic Developments June 2018

SUMMARY OF MACROECONOMIC DEVELOPMENTS

Permian Reserves May Be Much Smaller Than You Think: Tight Oil and Long-Term Debt Cycle

Chapter 1 International economy

Monthly Economic and Financial Developments April 2006

Third-Quarter U.S. Crude Review and Outlook Higher prices, production, and exports.

The President s Report to the Board of Directors

Monetary Policy Report II / 2018

Oil: A Perfect Storm Hits Prices OCTOBER 23, 2014

Nonfarm Payroll Employment

TREASURY RESEARCH. Inside this issue: Revenues in 2013 are budgeted at SAR 829 billion, which is 18% higher than 2012 budgeted figure.

Jul-Sep nd Preliminary GDP Estimate

Oil Value Chain & Markets. Global Oil Markets

Alaska Power Association: Accounting & Finance Conference

2019 economic outlook:

Using Comparative Inventory to Bet Against the Oil Market

Aug-12. Oct-13. Dec-14. Feb-16

The light tight oil revolution -- the rollover and the recovery Production in major US shale plays, millions of barrels/day

Saudi Arabian economy Saudi crude production less synchronized with global growth

BNM Maintains OPR at 3.25%, Hawkish About Economic Outlook

Economic and Revenue Update

Crude oil: What s in store for 2018?

HKU announces 2015 Q4 HK Macroeconomic Forecast

Inflation Update. Mild pick-up in inflation rates

Asia Bond Monitor November 2018

News & Development Bollinger Band Retracement Levels Rising Channel Overall, we maintain our bullish view in MCX Crude Oil for the next one month.

Ben Brunnen, Vice President, Oil Sands January 19, Upstream Oil and Gas Industry Outlook Presentation to Alberta s Industrial Heartland

Real Effective Exchange Rate based on CPI as Price Index for India*

Oil: An Ongoing Story of Supply and Demand

The Flowing Oil Chartbook December 14, 2016

U.S. Steel Market Outlook. Amy Ebben ArcelorMittal USA November 30, 2018

Economic Indicators December 2017

CENTRAL BANK POLICY RATE

Global Markets Group. Trade Performance: Narrowing Surplus Author: Juniman Chief Economist. Economic Research. Trade Outlook Monthly Report

Saudi Arabian economy

HKU announces 2014 Q4 HK Macroeconomic Forecast

Ontario Economic Accounts

BBVA Research U.S. Economic Outlook March 2019 / 1. U.S. Economic Outlook March 2019

OCBC Crude Oil Outlook. Barnabas Gan Economist Global Treasury Research & Strategy 9 February 2017

Saudi Chartbook. Summary. November Real Economy: Economic data for September showed a downward trend in economic activity.

Monthly Economic and Financial Developments February 2007

RUSSIAN ECONOMIC OUTLOOK AND MONETARY POLICY CHALLENGES RUSSIAN ECONOMIC OUTLOOK AND MONETARY POLICY CHALLENGES. Bank of Russia.

The real change in private inventories added 0.15 percentage points to the second quarter GDP growth, after subtracting 0.65% in the first quarter.

The oil market remains strong

Saudi Arabian Economy

Inflation projection of Narodowy Bank Polski based on the NECMOD model

Improved Macroeconomic Conditions Boost Consumer Sentiment to Its Highest Level in 3½-Year

CBER Indexes for Nevada and Southern Nevada

DRILLING AND MORE OPEC, FLARING, OFFSHORE. FundamentalEdge Report July learn more at drillinginfo.com

Global Markets Group. Trade Performance: Depressed by the Eid holiday Author: Juniman Chief Economist. Economic Research. Trade Outlook Monthly Report

The Flowing Oil Chartbook March 1, 2017

Quarterly Report. April June 2015

Monetary Policy Report I / 2018

ENERGY. Monthly Report. September 2015

Latin American E&P Outlook

Construction Industry Focus Survey. Volume 27 Issue 2 November 2017

SEPTEMBER Overview

Saudi Arabian economy Moderation in 2013 and rebound in 2014

Saudi Arabian economy

RUSSIAN ECONOMIC OUTLOOK AND MONETARY POLICY. RUSSIA S ECONOMIC OUTLOOK AND MONETARY POLICY December 2018

ECONOMIC AND FINANCIAL HIGHLIGHTS

QUO VADIS, OPEC+? executive summary

The OPEC-Middle East Investment Cycle. Bassam Fattouh. Oxford Institute for Energy Studies

MBA Forecast Commentary Joel Kan

BBVA Research U.S. Economic Outlook August 2018 / 1. U.S. Economic Outlook August 2018

Transcription:

COMPARATIVE ANALYSIS OF MONTHLY REPORTS ON THE OIL MARKET AN INTERNATIONAL ENERGY FORUM PUBLICATION NOVEMBER 2018 RIYADH, SAUDI ARABIA NOVEMBER 2018 SUMMARY FINDINGS FROM A COMPARISON OF DATA AND FORECASTS ON THE OIL MARKET BY THE INTERNATIONAL ENERGY AGENCY (IEA) AND ORGANIZATION OF THE PETROLEUM EXPORTING COUNTRIES (OPEC). FEATURING A COMPARATIVE ANALYSIS OF OIL INVENTORY DATA REPORTED BY JODI, THE IEA, OPEC AND SECONDARY SOURCES IN COLLABORATION WITH THE RAPIDAN ENERGY GROUP. 1. NOTE BY THE SECRETARY GENERAL 2 2. KEY POINTS 3 2.1 DEMAND 2.2 SUPPLY 2.3 STOCKS 2.4 SNAPSHOT (mb/d) 3 3 3 4 3. GLOBAL ANALYSIS 5 3.1 DEMAND DATA 3.2 SUPPLY DATA 3.3 STOCK DATA 3.3.1. GLOBAL STOCK ANALYSIS 5 6 8 9 COMPARATIVE ANALYSIS OF MONTHLY REPORTS ON THE OIL MARKET RIYADH, SAUDI ARABIA NOVEMBER 2018

1. NOTE BY THE SECRETARY GENERAL The IEF conducts a comprehensive comparative analysis of the short-, medium-, and long-term energy outlooks of the IEA and OPEC, to inform the IEA-IEF-OPEC Symposium on Energy Outlooks that the IEF hosts in Riyadh as part of the trilateral work programme on a yearly basis. To inform IEF stakeholders on how perspectives on the oil market of both organisations evolve over time more regularly, this monthly summary provides: Key findings and a snapshot overview of data points gained from comparing basic historical data and short-term forecasts of the IEA Oil Market Report and the OPEC Monthly Oil Market Report Features a comparative analysis of oil inventory data reported by JODI, the IEA, OPEC, and secondary sources in collaboration with the Rapidan Energy Group Moreover, international developments this month that will have an impact oil market balances are as follows: Growing Oil Supply Growing supply in the US due to pipeline expansions coupled with rising production from Saudi Arabia and Russia has put downward pressure on oil prices. Canadian Crude Increasing oil production and the lack of pipeline capacity has Canadian crude selling at unprecedented low prices. Iran Sanctions The US granted temporary waivers to eight countries, including China and India, the biggest purchasers of Iran s oil, that will allow them to purchase Iranian crude for the time being. I trust this month s analysis helps to sharpen focus on evolving short-term market perspectives. Dr Sun Xiansheng Secretary General International Energy Forum COMPARATIVE ANALYSIS OF MONTHLY REPORTS ON THE OIL MARKET RIYADH, SAUDI ARABIA NOVEMBER 2018 2

2. KEY POINTS 2.1 DEMAND OPEC revised its world demand growth numbers down for the second consecutive month while the IEA saw a slight increase. The IEA revised up its growth figure by 30 kb/d while OPEC growth is lowered by 40 kb/d from last month s assessment leading to a 190 kb/d difference in growth between the two organisations. The IEA world demand growth projection amounts to 1.31 mb/d in 2018. OPEC s demand growth stands at 1.50 mb/d OPEC s lowest growth reported for 2018. The IEA and OPEC estimates for absolute world demand for November are 99.19 mb/d and 98.79 mb/d, respectively. The IEA and OPEC demand growth forecasts for Non-OECD countries dip further in November and are at their lowest point this year. The decline is attributable to the IEA s revision in Non-OECD Middle East demand growth to -0.08 mb/d that compares to -0.03 mb/d last month. This has brought the IEA s Non-OECD growth assessment for October down to 0.95 mb/d. OPEC Non-OECD demand growth projection is also revised down slightly by 90 kb/d for a total growth of 1.06 mb/d. The IEA reports OECD growth at 0.36 mb/d up by 60 kb/d. OPEC s OECD demand growth projection slightly increases to 0.44 mb/d. The IEA and OPEC now differ in their assessments on OECD demand growth by 80 kb/d. 2.2 SUPPLY The IEA and OPEC s Non-OPEC supply growth continues to soar and now is at its highest level. The IEA s November assessment for Non-OPEC growth is up by 160 kb/d for a total growth of 2.35 mb/d. OPEC s assessment for Non-OPEC growth is not far off and up by 90 kb/d for total growth of 2.31 mb/d. In absolute values OPEC and the IEA estimate non-opec supply at 60.32mb/d and 59.86 mb/d respectively. The US, Russia and Canada remain the top Non-OPEC producing jurisdictions. According to the IEA and OPEC, US production is set to grow at 2.1 mb/d in 2018 and 1.3 mb/d and 1.7 mb/d respectively in 2019. The IEA and OPEC report a slight drop in Non-OECD supply growth and show their closest alignment this year. IEA growth figures decreased 40 kb/d and OPEC decreased 20 kb/d to reach 0.08 mb/d and 0.07 mb/d, respectively with a difference of 10 kb/d. 2.3 STOCKS The IEA and OPEC continue to report strong alignment on stock figures. The IEA reports 2875 mb in OECD stock that is 8mb below the five-year average. OPEC s assessment is not far off with 2858 mb in OECD stock that is 25 mb below the five-year average. The divergence between OPEC and the IEA stands at 17 mb for November. Total US crude inventories (excluding SPR) in November amount to about 451 mb according to the US Energy Information Administration (EIA). EIA reports U.S. crude oil inventories are about 7 percent above the fiveyear average for this time of year. OPEC reports US stock above the five-year average by about 10 mb based on September data. COMPARATIVE ANALYSIS OF MONTHLY REPORTS ON THE OIL MARKET RIYADH, SAUDI ARABIA NOVEMBER 2018 3

2.4 SNAPSHOT (mb/d) Demand OECD Growth Δ m/m Non- OECD Growth Δ m/m World Growth Δ m/m IEA 47.78 0.36 +0.06 51.41 0.95-0.04 99.19 1.31 +0.02 OPEC 47.86 0.44 +0.05 50.92 1.06-0.09 98.79 1.50-0.04 Difference 0.08 0.08 0.01 0.49 0.11 0.05 0.40 0.19 0.06 Supply OECD Growth Δ m/m Non- OECD Growth Δ m/m NOPEC Growth Δ m/m OPEC Growth Δ m/m IEA 26.36 2.16 +0.21 29.08 0.08-0.04 60.32 2.35 +0.16 32.99 0.20 +0.10 OPEC 27.92 2.20 +0.11 29.70 0.07-0.02 59.86 2.31 +0.09 32.90 0.13-0.15 Difference 1.56 0.04 0.10 0.62 0.01 0.02 0.46 0.04 0.07 0.09 0.07 0.25 Stocks (mb) OECD US OECD to 5- Year Average US to 5-Year Average IEA 2875 - -8 mb - OPEC 2858 432-25 mb +9.7 EIA 451-7% above Data obtained from IEA Oil Market Report, 14 November 2018; OPEC Monthly Oil Market Report, 13 November 2018 and Energy Information Administration, Weekly Petroleum Status Report, 28 November 2018 *Totals in table may not exactly reflect content due to independent rounding. COMPARATIVE ANALYSIS OF MONTHLY REPORTS ON THE OIL MARKET RIYADH, SAUDI ARABIA NOVEMBER 2018 4

3. GLOBAL ANALYSIS According to the IEA, the outlook for the global economy has been revised downwards since the last report given trade growth is expected to decline due to weakening global economic activity and rising trade tensions. The IEA quotes the IMF s October 2018 outlook, in which the Fund revised world economic growth from 3.9 percent to 3.7 percent for both 2018 and 2019. Meanwhile, OPEC s global economic growth forecast for 2018 remains unchanged at 3.7 percent, while the 2019 forecast was revised down slightly to 3.5 percent. The revision was due to a slowing dynamic amid rising trade tensions, monetary tightening, particularly in the US, and challenges in emerging markets and developing economies. 3.1 DEMAND DATA Absolute Demand The IEA s estimate for global demand growth in November stands at 1.31 mb/d up by 30 kb/d from 1.31 mb/d in last month s report for an absolute demand of 99.19 mb/d in 2018. The outlook for global oil demand growth is largely unchanged since last month s report, at 1.3 mb/d in 2018 and 1.4 mb/d in 2019 as a deteriorating outlook for the global economy is largely offset by the fall in Brent crude oil prices. OPEC s global demand outlook has also decreased to 1.50 mb/d down by 40 kb/d compared to last month s projections due to weaker-than-expected oil demand data from the Middle East and, to a lesser extent, China during 3Q18. This leads to a projected total global consumption of around 98.79 mb/d for the month of November. OPEC-IEA divergence in overall world demand stands at 0.40 mb/d up from 0.37 mb/d in October. OECD Demand The IEA continues to see robust OECD oil demand growth at 0.36 mb/d, up slightly from last month s figure of 0.30, anticipating total OECD consumption for 2018 at 47.78 mb/d. OPEC marginally revised up its growth projection for the OECD region to 0.44 mb/d from 0.39 mb/d. OPEC total OECD demand now stands at 47.86 mb/d. The divergence of OECD oil demand growth between the IEA and OPEC now stands at 0.08 mb/d. The IEA reports a 0.07 mb/d upward revision in OECD Americas demand growth from 0.37 mb/d in last month s report to 0.44 mb/d, while OPEC s estimate rose by 0.05 mb/d to 0.40 mb/d from 0.35 mb/d. OECD Europe demand growth remains unchanged at -0.01 mb/d according to IEA data. OPEC s OECD Europe growth figure is also unchanged at 0.05 mb/d. The IEA s and OPEC s assessments for demand growth and absolute demand differ by 0.08 mb/d. Non-OECD Demand Both, the IEA and OPEC anticipate continued growth in non-oecd demand for this year at 0.95 mb/d and 1.06 mb/d respectively, with total non-oecd demand forecasts averaging 51.41 mb/d and 50.92 mb/d respectively. The IEA s and OPEC s assessments for 2018 non-oecd demand growth and absolute demand now differs by 0.11 mb/d and 0.49 mb/d, respectively. The IEA s regional demand growth adjustments in 2018 reflect a decreased pace of demand growth for China reported at 0.50 mb/d year-on-year (y-o-y) compared to 0.53 mb/d last month. Although a strong aviation sector has increased kerosene demand, the fall of car sales in September and October by 12 percent and 13 percent, respectively compounded by the end of government tax rebates, new credit restrictions, growing used car sales and weakening consumer confidence are key reasons for the fall in demand. OPEC s Chinese demand growth was also revised downwards to 0.39 from 0.42 mb/d last COMPARATIVE ANALYSIS OF MONTHLY REPORTS ON THE OIL MARKET RIYADH, SAUDI ARABIA NOVEMBER 2018 5

month and echoing the same decline in car sales as a major factor along with trade concerns with the U.S. The potential of growth in alternative vehicles and general efficiencies are also cited. The IEA s Indian demand growth for 2018 remains unchanged at 0.26 to reach 4.83 mb/d in 2018. Although the government is encouraging the replacement of kerosene in the residential sector, a booming aviation industry is keeping demand at stable levels. Meanwhile, OPEC s Indian demand growth assessment also remains unchanged at 0.22 mb/d for total consumption to reach 4.75 mb/d in 2018. Rising average income levels, a continuously improving road network and firm and expanding vehicle sales are factors behind the growth in oil as it pertains to transportation. Projections for non- OECD Asia, as a whole, show growth at 0.83 mb/d according to OPEC and 0.90 mb/d according to the IEA. See the following graph for the monthly revisions of IEA and OPEC annual estimates for 2017 and new estimates for 2018 demnd. *monthly estimates rounded to the nearest barrel. 3.2 SUPPLY DATA Non-OPEC Supply OPEC s November assessment of total non-opec supply for 2018 stands at 59.86 mb/d. Supply growth has been revised up 0.09 mb/d to 2.31 mb/d driven by expected growth in the US (2.06 mb/d), Canada (0.29 mb/d) and Kazakhstan (0.09 mb/d). Growing output from these countries is offset by declining production from Mexico (-0.14 mb/d), Norway (-0.11 mb/d) and Vietnam (-0.03 mb/d). US tight crude for 2018 is forecast to grow by 1.48 mb/d y-o-y to average 6.19 mb/d, revised up by 0.16 mb/d from last month s assessment with the Permian accounting for about 61 percent share of US tight crude growth in 2018. The IEA forecasts a non-opec supply of 60.32 mb/d with a year-on-year growth of 2.35 mb/d with COMPARATIVE ANALYSIS OF MONTHLY REPORTS ON THE OIL MARKET RIYADH, SAUDI ARABIA NOVEMBER 2018 6

the US being the catalyst for non-opec supply growth at 2.12 mb/d. While infrastructure bottlenecks were expected to slow-down US production, pipeline expansion plans to increase off-take capacity has had the opposite effect. Although Canadian production is robust with a growth of 0.27 mb/d, the future remains uncertain due to the lack of evacuation capacity that results in Canadian oil to be traded at steep discounts relative to the WTI benchmark. The recent halt in construction of the Keystone XL pipeline exacerbates the situation. Russian production also continues to rise with a growth of 0.19 mb/d for 2018 and could rise next year unless production cuts are ordered by the government. OECD Supply OPEC and the IEA both forecast OECD growth at 2.20 mb/d and 2.16 mb/d with total supply reaching 27.92 mb/d and 26.36 mb/d respectively. The IEA s data shows OECD Americas liquids supply growth at 2.26 mb/d to reach 22.58 mb/d total supply while OPEC reports slightly lower growth at 2.21 mb/d with total liquids supply at 23.71 mb/d for 2018. Growth within the region is led by the US for which OPEC revised its liquid supply forecast up to 2.06 mb/d to 16.46 mb/d while the IEA projects a higher US growth by 2.12 mb/d to amount to 15.39 mb/d. OPEC reports a decline in OECD Europe supply growth of -0.03 mb/d for total production of 3.80 mb/d in 2018. The IEA reports less OECD Europe supply at 3.38 mb/d for a decline in yearly growth of 0.11 mb/d. Both the IEA and OPEC see the UK as the primary driver of OECD Europe supply. OPEC Supply According to secondary sources, total OPEC-15 preliminary crude oil production averaged 32.90 mb/d in October, an increase of 127 kb/d over the previous month. Increases were reported in the UAE, Saudi Arabia, Libya and Angola, while production declined in Iran, Venezuela, Kuwait and Nigeria. The IEA reports that record production from the UAE and Saudi Arabia in October raised OPEC crude output by 200 kb/d to 32.99 mb/d, more than compensating for production losses from Iran. See the graph below for the monthly revisions of IEA and OPEC annual estimates for 2017 and new estimates for 2018 supply, and the tables for annual estimates for total supply. IEA and OPEC supply see rising Non OPEC supply growth IEA and OPEC continue to see strong convergence on OECD/Non OECD growth 2.50 Monthly Revisions of Annual Non OPEC Liquids Supplies Estimates 2017/16, and 2018/17 from November 2018 2.00 1.50 1.00 0.50 0.00 0.50 Nov 17 Dec 17 Jan 18 Feb 18 Mar 18 Apr 18 May 18 Jun 18 Jul 18 Aug 18 Sep 18 Oct 18 Nov 18 IEA (OECD) IEA (Non OECD) IEA (Total Non OPEC Supply) OPEC (OECD) OPEC (Non OECD) OPEC (Total Non OPEC Supply) IEF comparative analysis of IEA and OPEC Monthly Reports on the Oil Market November 2018 *monthly estimates rounded to the nearest barrel. COMPARATIVE ANALYSIS OF MONTHLY REPORTS ON THE OIL MARKET RIYADH, SAUDI ARABIA NOVEMBER 2018 7

3.3 STOCK DATA OECD commercial stocks rose counter-seasonally by 12.1 mb month-on-month (m-o-m) in September to 2,875 mb. Inventories were just 8 mb below the average at the end of September. According to OPEC, preliminary data for September showed that total OECD commercial oil stocks rose by 5.5 mb m-o-m to stand at 2,858 mb. This was 111 mb lower than the same time one year ago, and 25.3 mb below the latest five-year average. While both organizations report closely aligned data on OECD stocks due to a continuous and reliable data stream and data harmonization efforts, comprehensive data on stock developments for non-oecd countries is still work in progress. See the graphs below for monthly estimates of OECD total commercial oil stocks for 2017 and 2018. IEA and OPEC data shows convergence on OECD stock draws Comprehensive non OECD stock data remains missing Mb 3100 Monthly estimates of OECD total commercial oil stocks for 2017 and 2018 3050 3000 2950 2900 2850 2800 2750 2700 2650 IEA (OECD total commercial stocks)* OPEC (OECD total commercial stocks) IEF comparative analysis of IEA and OPEC Monthly Reports on the Oil Market November 2018 IEA and OPEC report closely aligned OECD stock balances Surplus stocks data drops to 8 and 25 mb Mb OECD total commercial oil stocks relative to 5 year moving average* 450 375 300 225 150 75 0 five year average = 0 75 Aug 15 Nov 15 Feb 16 May 16 Aug 16 Nov 16 Feb 17 May 17 Aug 17 Nov 17 Feb 18 May 18 Aug 18 OPEC (OECD total stocks vs 5 y avg) IEA (OECD total stocks vs 5 y avg) IEF comparative analysis of IEA and OPEC Monthly Reports on the Oil Market November 2018 *monthly estimates rounded to the nearest barrel. COMPARATIVE ANALYSIS OF MONTHLY REPORTS ON THE OIL MARKET RIYADH, SAUDI ARABIA NOVEMBER 2018 8

3.3.1 GLOBAL STOCK ANALYSIS OECD and JODI non-oecd crude and product inventory data show a net 1.8 mb draw in September IEA data show OECD commercial inventories grew counter-seasonally in September by 12.1 mb to 2,875 mb. The agency estimates 3Q18 stocks grew by 58.1 mb (the largest quarterly increase since 2015). Likewise, OPEC shows OECD stocks rose by 5.5 mb in September to 2,858 mb. JODI non-oecd* data for September imply crude stocks dropped by 11.1 mb and product stocks fell by 1.6 mb. The largest crude and product draws occurred in Nigeria (-3.2 mb and -10.2 mb, respectively). Together, IEA OECD inventory data and JODI non-oecd data imply global crude and product stocks drew by a marginal 1.8 mb in September and rose by 39.1 mb during 3Q18. OECD product inventories grew by a massive 93.4 mb in 3Q18 driven by a 52.7 mb increase in the US. The data implies inventories have increased by a net 64.3 mb since the beginning of 2018. This estimate falls squarely between IEA and OPEC s diverging 2018 global oil balances. IEA s balance implies global inventories rose by 144.7 mb between 1Q18 and 3Q18, while OPEC s balance implies a 12.8 mb draw. * Non-OECD data is the aggregate of country-level data through JODI. Not all non-oecd countries report inventory data and the countries in the aggregate may vary monthly depending on regularity of individual country reporting. Global Inventory Changes September 2018 3Q18 1Q18-3Q18 (mb) Crude Products Total Crude Products Total Crude Products Total OECD Commercial (IEA) 10.7 22.9 12.2 35.3 93.4 58.1 46.2 68.5 22.3 OECD SPR (IEA) 0.8 0.5 1.3 1.3 3.0 4.2 2.5 0.1 2.3 Available JODI Non- OECD Data* 11.1 1.6 12.7 19.4 4.7 14.7 13.4 30.9 44.3 Total 22.6 20.7 1.8 56.0 95.1 39.1 35.3 99.6 64.3 IEA s Implied Global Supply Surplus OPEC s Implied Global Supply Surplus 82.5 144.7 7.4 12.8 * Aggregate of all non-oecd data available through JODI. Not all non-oecd countries report inventory data and the countries in the aggregate may vary monthly depending on regularity of individual country reporting. Source: IEA, JODI, OPEC, Platts, Rapidan Energy Group COMPARATIVE ANALYSIS OF MONTHLY REPORTS ON THE OIL MARKET RIYADH, SAUDI ARABIA NOVEMBER 2018 9

120 Monthly Change in OECD and Non OECD* Crude + Product Inventories 100 80 60 40 Million Barrels 20 0-20 -40-60 -80 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 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 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Chinese Products (JODI) Non-OECD* Crude (JODI) OECD Crude Non-OECD* (ex. China) Products (JODI) OECD Products Net Non-OECD* (JODI) and OECD Crude + Products * Aggregate of all non-oecd data available through JODI. Not all non-oecd countries report inventory data and the countries in the aggregate may vary monthly depending on the regularity of individual country reporting. Source: IEA, JODI, Rapidan Energy Group Million Barrels 500 450 400 350 300 250 200 150 100 50 0-50 -100-150 Dec-14 Accumulative OECD and Non OECD* Crude + Product Builds Since End 2014 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Chinese Products (JODI) Non-OECD* Crude (JODI) OECD Crude Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Non-OECD* (ex. China) Products (JODI) OECD Products Net Non-OECD* (JODI) and OECD Crude + Products * Aggregate of all non OECD data available through JODI. Not all non OECD countries report inventory data and the countries in the aggregate may vary monthly depending on the regularity of individual country reporting. Source: IEA, JODI, Rapidan Energy Group Jun-18 Jul-18 Aug-18 Sep-18 COMPARATIVE ANALYSIS OF MONTHLY REPORTS ON THE OIL MARKET RIYADH, SAUDI ARABIA NOVEMBER 2018 10