World Oil Market report-IEA-2010

10 December 2010
HIGHLIGHTS

• Cold winter weather hard on the heels of exceptional 3Q10 global
demand growth pushed prices to two‐year highs over $90/bbl by early
December. Prompt demand strength saw price structures favour the front
end of the curve and focus is again firmly on market fundamentals. At
writing, benchmark crudes were trading at $88‐$91/bbl.
• Global oil product demand is revised up by 130 kb/d to 87.4 mb/d in 2010,
and by 260 kb/d to 88.8 mb/d in 2011, on stronger data from OECD North
America and non‐OECD Asia. Growth in 2010 (+2.5 mb/d y‐o‐y) is largely
driven by buoyant gasoil demand, notably in 3Q10, but expansion should
slow to +1.3 mb/d in 2011 as temporarily supportive factors fade.
• Global oil supply rose by 0.4 mb/d to 88.1 mb/d in November, largely due
to increased non‐OPEC production, notably from Canada, Kazakhstan and
Brazil. Non‐OPEC supply now averages 52.8 mb/d in 2010 and 53.4 mb/d in
2011, representing growth of 1.1 mb/d and 0.6 mb/d, respectively. OPEC
NGLs output is seen averaging 5.3 mb/d this year and 5.8 mb/d in 2011.
• OPEC crude oil production in November inched higher, by 45 kb/d to
29.2 mb/d. Effective spare capacity stands at 5.6 mb/d. The ‘call on OPEC
crude and stock change’ for 2011 is raised by 100 kb/d this month, to an
estimated 29.5 mb/d, on higher demand projections.
• October OECD industry stocks built by a modest 0.7 mb to 2 745 mb, or
60.1 days, as crude builds balanced out product draws in Europe and North
America. Preliminary data point to an 8.4 mb decline in November OECD
inventories, but oil held in floating storage rose.
• Global crude runs are estimated to have fallen by 2.2 mb/d in October, as
a small increase in the non‐OECD failed to offset sharp decline in the OECD,
where industrial action in France coincided with peak maintenance in the
US and Japan. 4Q10 global throughputs are estimated at 73.8 mb/d,
1.8 mb/d less than 3Q10, but still a healthy 1.3 mb/d above a year ago.
• An update of June’s medium‐term projections to 2015 includes similar GDP
and price assumptions, but with baseline estimates for supply and, most
notably, demand revised sharply higher. Despite a stronger non‐OPEC
supply outlook, spare capacity tightens in the Base Case to 3.6 mb/d by
2015. A weaker GDP case shows spare capacity remaining more stable near
current levels.
TABLE OF CONTENTS
HIGHLIGHTS ............................................................................................................................................................................................................................... 1
TAKING STOCK ........................................................................................................................................................................................................................ 3

2010 buoyancy seen easing in 2011 .................................................................................................................................................................................. 3
Underlying assumptions for 2011-2015 similar to June................................................................................................................................................ 3
Medium-term demand rising off a higher base ............................................................................................................................................................... 3
Oil supply activity remains buoyant .................................................................................................................................................................................. 4
Refining – ‘build, baby, build’ ............................................................................................................................................................................................... 5
Pulling it all together – the global balance to 2015........................................................................................................................................................ 6
DEMAND ...................................................................................................................................................................................................................................... 8
Summary .................................................................................................................................................................................................................................. 8
Global Overview ................................................................................................................................................................................................................... 9
Medium-Term Update........................................................................................................................................................................................................ 10
OECD .................................................................................................................................................................................................................................... 11
North America ............................................................................................................................................................................................................... 12
No Reverse Gear Yet: US Gasoline Demand Plods Ahead ......................................................................................................................... 14
Europe .............................................................................................................................................................................................................................. 15
Watching the Mercury .......................................................................................................................................................................................... 15
Pacific ................................................................................................................................................................................................................................ 16
Non-OECD........................................................................................................................................................................................................................... 17
China ................................................................................................................................................................................................................................ 18
Other Non-OECD ........................................................................................................................................................................................................ 19
SUPPLY ........................................................................................................................................................................................................................................ 20
Summary ................................................................................................................................................................................................................................ 20
OPEC Crude Oil Supply .................................................................................................................................................................................................... 21
Medium-Term OPEC Capacity on Track to Increase to 36.9 mb/d by 2015 ....................................................................................................... 23
Non-OPEC Overview ........................................................................................................................................................................................................ 25
Non-OPEC Medium-Term Outlook Now Seen Brighter.......................................................................................................................................... 26
OECD .................................................................................................................................................................................................................................... 27
North America ............................................................................................................................................................................................................... 27
Longer Drilling Delays Seen in Gulf of Mexico ............................................................................................................................................... 28
North Sea ........................................................................................................................................................................................................................ 29
Pacific ................................................................................................................................................................................................................................ 29
Former Soviet Union (FSU) .............................................................................................................................................................................................. 30
Other Non-OPEC ............................................................................................................................................................................................................... 31
Lower Baseline, But Still Strong Biofuels Growth in the Medium-Term ............................................................................................................... 32
OECD STOCKS ........................................................................................................................................................................................................................ 33

Summary ................................................................................................................................................................................................................................ 33
OECD Inventory Position at End-October and Revisions to Preliminary Data ................................................................................................... 33
Analysis of Recent OECD Industry Stock Changes .................................................................................................................................................... 34
OECD North America ................................................................................................................................................................................................. 34
OECD Europe ................................................................................................................................................................................................................ 35
Accounting for French October Strikes ........................................................................................................................................................... 36
OECD Pacific .................................................................................................................................................................................................................. 36
Recent Developments in China and Singapore Stocks ............................................................................................................................................... 37
PRICES ......................................................................................................................................................................................................................................... 39
Summary ................................................................................................................................................................................................................................ 39
Market Overview ................................................................................................................................................................................................................ 39
Futures Markets ................................................................................................................................................................................................................... 41
Regulatory Overhaul in the Over-the-Counter Market ............................................................................................................................................ 42
Spot Crude Oil Prices ........................................................................................................................................................................................................ 44
Spot Product Prices ............................................................................................................................................................................................................ 45
Refining Margins ................................................................................................................................................................................................................... 46
End-User Product Prices in November ......................................................................................................................................................................... 48
Freight .................................................................................................................................................................................................................................... 48
REFINING ................................................................................................................................................................................................................................... 50
Summary ................................................................................................................................................................................................................................ 50
Global Refinery Throughput ............................................................................................................................................................................................. 50
Medium-Term Update: Refinery Closures Fail to Dent Global Capacity Additions ........................................................................................... 51
OECD Refinery Throughput ............................................................................................................................................................................................ 53
Processing Gains Update ................................................................................................................................................................................................... 53
Europe Prepares to Switch Off-road Diesel to 10 ppm ....................................................................................................................................... 56
Non-OECD Refinery Throughput................................................................................................................................................................................... 57
OECD Refinery Yields ....................................................................................................................................................................................................... 58
TABLES ........................................................................................................................................................................................................................................ 60
I NTERNATIONAL E NERGY A GENCY ‐ O IL M ARKET R EPORT M ARKET O VERVIEW
TAKING STOCK

2010 buoyancy seen easing in 2011
November crude prices continued the uptick evident since August, gaining 3% to average around $85/bbl
for the month and touching $90/bbl in early December. Middle distillates cracks have also looked strong.
Fingers still point at shadowy ‘speculative’ inflows to futures and derivatives markets, but a more
plausible foundation for price strength lies with now apparent 3Q fundamentals. Upward demand
revisions have outstripped those for supply, and suggest that global demand grew by a giddy 3.3 mb/d
year‐on‐year in 3Q (42% of which was gasoil/diesel).
This implies a global net stock draw of some 1.3 mb/d, mb/d 3Q Demand Surges Ahead of Supply mb/d
the largest since 4Q07, showing that fundamentals do 89 1.0
matter, even if they sometimes only become evident 88 0.5
after the event. 87 0.0
86 -0.5
Fourth quarter supply and demand look better 85 -1.0
balanced, assuming OPEC production remains flat at 84 -1.5
recent levels (OPEC ministers meet in Quito on 83 -2.0
11 December). Although economic concerns remain 1Q07 1Q08 1Q09 1Q10
skewed to the downside (not least if current high prices Implied Stock Ch.&Misc to Bal (RHS)
Oil Demand
begin to act as a drag on growth), more immediately Oil Supply
demand could surprise to the upside. Recent harsh
northern hemisphere weather, allied to electric power rationing in China, if sustained, could push short‐
term demand (again, largely gasoil/diesel) higher and tighten market balances further. However, cheap
gas prices and an ongoing structural shift away from oil in industry and power generation suggest the
sensitivity of OECD demand in the event of cold weather is diminishing over time. Either way, global
demand growth should ease in 2011, from 2.5 mb/d to 1.3 mb/d, amid renewed structural OECD decline,
and as post‐recession froth in markets like China subsides.

Underlying assumptions for 2011-2015 similar to June
As last year, the December OMR presents an update of the medium‐term projections generated in June.
This update revisits the economic growth and oil price assumptions deployed then, and incorporates
supply and demand baseline changes noted over the last six months. Oil supply and refining capacity
new‐build plans are revisited, as are assumptions on activity levels and decline rates, where appropriate.

The futures price strip deployed as our starting point remains in a similar $75‐$85/bbl range, albeit
2011‐2013 prices come in marginally higher than in June. Trend economic growth for 2010 onwards
under the base case remains close to 4.5% annually (based on the IMF’s October outlook), while a lower
variant nearer 3.3% continues to be run in parallel. In short, there is not much change in background
assumptions, albeit baseline 2010 supply and demand levels look higher than they did in June.

Medium-term demand rising off a higher base
OECD oil demand has proven stronger in 2010 than estimated at mid‐year amid a post‐recessionary
bounce and off‐trend weather patterns, which boosted 3Q10 oil demand in particular. However,
renewed structural decline remains the most likely OECD trend going forward. Weakening economic
growth next year, and an assumption that temperatures revert to ten‐year averages, suggest that OECD
demand could fall by around 0.3 mb/d per year between now and 2015. The prospect of low natural gas
prices reinforces the trend. But anticipated OECD weakness is offset by growth of nearly 1.5 mb/d
annually in the non‐OECD, much of it from middle distillates. Non‐OECD demand has averaged within
0.6 mb/d of our earlier estimates so far in 2010. Looking forward, the key difference in our lower GDP
10 D ECEMBER 2010 3

M ARKET O VERVIEW I NTERNATIONAL E NERGY A GENCY ‐ O IL M ARKET R EPORT
sensitivity is that non‐OECD demand growth slows to a more modest 1.1 mb/d annually, given the
greater oil intensity in developing countries. In both scenarios, absolute levels of non‐OECD demand
come to dominate the global picture by 2014, in much m b/d
Global Oil Product Demand
the same way non‐OECD growth has done since 2005. 94
Better data is needed on non‐OECD fundamentals if we
92
are to fully capture evolving market trends, while
consumer responses to high crude prices there are also 90
frequently obscured by end‐user subsidies. 88

86
All told, the demand baseline for 2010/2011 is around
1.1 mb/d higher than we anticipated in June. Demand 84
2009 2010 2011 2012 2013 2014 2015
reaches 93.4 mb/d by 2015 in the base case (1.5 mb/d
June 2010 MTOGM
higher than previously) and 91.5 mb/d in the lower
With Baseline & GDP Revisions (IMF, October 2010)
growth case. Once again, the difference between the
two cases can be summarised as annual growth of 1.2 mb/d post‐2010 in the Base Case on the one hand
and 0.8 mb/d per year growth in the lower GDP case on the other. The difference may appear marginal,
but nonetheless has profound implications for the shape of the global oil market balance looking forward
to 2015.

Oil Demand Sensitivity
(millio n barrels per day)
Avg. Yearly Grow th, Avg. Yearly Grow th,

2009 2010 2011 2012 2013 2014 2015 2009-2015 2010-2015
% m b/d % m b/d
Base GDP & 3% Avg. Yearly Efficiency Gains
Global GDP (y-o-y chg) -0.8% 4.7% 4.2% 4.5% 4.5% 4.6% 4.6% 3.7% 4.5%
OECD 45.4 45.9 45.7 45.5 45.2 44.9 44.5 -0.3% -0.15 -0.6% -0.28
Non-OECD 39.5 41.5 43.1 44.6 46.0 47.4 48.9 3.6% 1.55 3.3% 1.47
World 85.0 87.4 88.8 90.0 91.2 92.3 93.4 1.6% 1.40 1.3% 1.19
Low er GDP & 2% Avg. Yearly Efficiency Gains
Global GDP (y-o-y chg) -0.8% 4.7% 2.8% 3.0% 3.0% 3.1% 3.0% 2.7% 3.3%
OECD 45.4 45.9 45.5 45.1 44.8 44.5 44.4 -0.4% -0.18 -0.7% -0.32
Non-OECD 39.5 41.5 42.7 43.5 44.6 45.8 47.1 3.0% 1.27 2.6% 1.13
World 85.0 87.4 88.2 88.7 89.3 90.3 91.5 1.2% 1.09 0.9% 0.81
Low er vs. Base
Global GDP (% points) 0.00 0.00 -1.34 -1.45 -1.48 -1.51 -1.52 -1.0 -1.2
OECD 0.00 0.00 -0.17 -0.35 -0.40 -0.34 -0.17 -0.1 -0.03 -0.1 -0.03
Non-OECD 0.00 0.00 -0.37 -1.01 -1.44 -1.68 -1.72 -0.6 -0.29 -0.7 -0.34
World 0.00 0.00 -0.54 -1.37 -1.84 -2.02 -1.89 -0.3 -0.31 -0.4 -0.38

Oil supply activity remains buoyant
Sustained high prices, elevated upstream activity levels, and a lull in cost inflation have seen oil supply in
2010 again exceed initial expectations. 2010 non‐OPEC supply is now estimated at 52.8 mb/d and is
some 0.6 mb/d higher than projected in June. Much of this derives from the Americas, with Mexico
successfully moderating earlier steep decline rates and US onshore and NGL supply helping offset drilling
delays from the Macondo disaster in the Gulf of Mexico (which trim a gross 0.3 mb/d off 2015 GoM
supply). For now, we do not assume more widespread fall‐out from the Macondo spill, at least for the
medium term, and deepwater production’s share rises from 6% to 8% of total supply by 2015 and from
22% to 28% of offshore production. Non‐OPEC supply continues to grow through 2015, reaching
54.0 mb/d. However, conventional crude oil (increasing in Brazil, Colombia, the Caspian and Russia)
generates only around 10% of expected non‐OPEC growth (+255 kb/d for 2009‐2015), with the bulk
coming instead from biofuels (+0.8 mb/d for 2009‐2015, to reach 2.4 mb/d), oil sands, NGLs and
other liquids.

4 10 D ECEMBER 2010
The expected profile for OPEC crude production capacity remains similar to that in June, with a net
increase of 2.1 mb/d to 36.9 mb/d now expected, compared with an equivalent gain of 1.9 mb/d six
months ago. While difficulties remain, the outlook for both Iraq and Nigeria has improved marginally.
But among OPEC and non‐OPEC producers alike, local engineering content contract clauses are causing
bottlenecks and delays. All told, Iraq (+1.1 mb/d), the UAE (+0.5 mb/d), Angola (+0.4 mb/d), Saudi Arabia
(+0.4 mb/d) and Libya (+0.2 mb/d) mb/d
World Oil Supply Capacity Growth
generate the bulk of capacity growth. 2.5
Meanwhile, expectations for Iran have 2.0
soured, with capacity expected to fall 1.5
from 3.9 mb/d to 3.1 mb/d by 2015 as 1.0
reinforced sanctions delay new 0.5
projects and accelerate field decline. 0.0
-0.5

OPEC NGL and condensate supply in -1.0
2009 2010 2011 2012 2013 2014 2015
2010 has been trimmed by 0.1 mb/d to OPEC Crude Capacity Growth OPEC NGLs Growth
5.3 mb/d. On average, the supply Global Biofuels Growth Non-OPEC Growth (ex Biofuels)
outlook has been scaled back by Total Net Change
0.3 mb/d since June, again reflecting a weaker trend from Iran. Nonetheless, healthy growth is still
expected as domestic gas use and LNG export capability is ramped up. Gas liquids supply increases by
2.2 mb/d to reach 7.1 mb/d in 2015, with growth centred on Qatar, Iran, UAE and Saudi Arabia.

Just as post‐recession demand growth is expected to ease, so the near‐2 mb/d growth in annual supply
capacity evident in 2009 and 2010 may equally not be sustained. For the medium term, claims about a
physical oil supply peak seem very wide of the mark. Nonetheless, against a backdrop of nearly 3 mb/d
lost each year from mature field decline, the industry still has to run pretty hard just to stand still. From
next year onwards through 2015, amid a lull in OPEC crude capacity start‐ups, feasible capacity growth
could therefore level out at closer to 1.0 mb/d per year.

Refining – ‘build, baby, build’
Globally, sustained weak margins in 2010 have done little to stem enthusiasm for new refining capacity.
If anything, this year’s buoyant demand growth has only added to the potential new capacity juggernaut
we envisaged for the medium term back in June. Distillation capacity (CDU) additions for 2009‐2015 now
total a weighty 9.2 mb/d, around 0.2 mb/d higher than
kb/d Crude Distillation Capacity Additions
previously projected. A further 15 mb/d combined of
2.5
upgrading and desulphurisation capacity is also planned. 2.0
Reflecting steady demand growth, and sizeable upgrading 1.5
capacity additions, 2015 refinery processing gains are now 1.0
estimated at 2.5 mb/d, around 0.2 mb/d higher than in 0.5
our previous report. These are added to oil supply in our 0.0
global market balance. -0.5
2010 2011 2012 2013 2014 2015
Nearly 40% of the new CDU capacity is expected to be OECD China
Other Asia Middle East
built in China and 70% is accounted for by the broader Latin America Other Non OECD
Asia and Middle East regions. In contrast, and reflecting
weakening local demand and low operating rates (French strikes and buoyant diesel/heating oil demand
have provided limited respite), identified OECD capacity closures for 2009‐2015 now stand at 1.4 mb/d,
around 0.4 mb/d higher than we foresaw in June. More rationalisation is likely to come, albeit stringent
exit regulations and high costs will mean closures lag the levels necessary to fully restore utilisation rates
and margins to mid‐2000s levels.

10 D ECEMBER 2010 5

M ARKET O VERVIEW I NTERNATIONAL E NERGY A GENCY ‐ O IL M ARKET R EPORT
Pulling it all together – the global balance to 2015

Global Balance Summary (Base Case)
(million barrels per day)
2009 2010 2011 2012 2013 2014 2015

GDP Growth Assumption (% per year) -0.81 4.65 4.16 4.49 4.52 4.56 4.56
Global Demand 84.98 87.45 88.77 90.02 91.19 92.30 93.38
Non-OPEC Supply 51.69 52.79 53.41 53.78 53.54 53.61 53.97
OPEC NGLs, etc. 4.81 5.29 5.84 6.26 6.62 6.89 7.06
Global Supply excluding OPEC Crude 56.49 58.08 59.25 60.05 60.16 60.50 61.03
OPEC Crude Capacity 34.86 35.50 35.22 35.31 35.67 36.67 36.94
Call on OPEC Crude + Stock Ch. 28.48 29.37 29.52 29.98 31.03 31.80 32.35
Implied OPEC Spare Capacity1 6.37 6.14 5.70 5.33 4.64 4.86 4.59
Effective OPEC Spare Capacity2 5.37 5.14 4.70 4.33 3.64 3.86 3.59
as percentage of global demand 6.3% 5.9% 5.3% 4.8% 4.0% 4.2% 3.8%
Changes since June 2010 MTOGM

Global Demand 0.21 1.06 1.08 1.15 1.21 1.31 1.45
Non-OPEC Supply 0.17 0.56 0.80 1.34 1.43 1.10 1.47
OPEC NGLs, etc. 0.14 -0.11 -0.41 -0.38 -0.28 -0.23 -0.18
Global Supply excluding OPEC Crude 0.31 0.46 0.39 0.96 1.15 0.87 1.29
OPEC Crude Capacity 0.01 -0.09 -0.14 0.07 0.16 0.15 0.16
Call on OPEC Crude + Stock Ch. -0.10 0.61 0.69 0.19 0.06 0.44 0.17
1
Effective OPEC Spare Capacity 0.11 -0.70 -0.83 -0.12 0.10 -0.28 -0.01
1 OPEC Capacity minus 'Call on Opec + Stock Ch.' 2 Historically effective OPEC spare capacity averages 1 mb/d below notional spare capacity.

Baseline supply and demand estimates for 2009/2010 are revised higher. Economic recovery is
underway, notably among the developing economies, but the industrial sector and public finances in the
OECD continue to provide cause for concern. Two years on from when the financial crisis morphed into
broader economic recession, it is still difficult to plot likely economic growth levels looking forward –
hence we retain twin demand scenarios, albeit the higher GDP trend represents our Base Case. High
crude prices and improving end‐use efficiency restrict oil demand growth to 1.2 mb/d annually post‐
2010, while the lower case sees demand growth nudge well below 1 mb/d. In both cases, non‐OECD
countries dominate growth and absolute demand, accounting for 52% of the market by 2015. Middle
distillate growth predominates, mb/d Medium-Term Oil Market Balance (Base Case) mb/d
suggesting once again a likely 4.0 8.0
bottleneck that refiners will 3.0 6.0
have to deal with.
2.0 4.0

1.0 2.0
Although upstream activity has
been buoyant throughout 2010, 0.0 0.0
and non‐OPEC supply prospects -1.0 -2.0
in particular look brighter than -2.0 -4.0

they did in June, it remains 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
difficult to expand the global Effective OPEC Spare Capacity (RHS) World Demand Growth
World Supply Capacity Growth
supply base quickly. Our own
analysis suggests 1 mb/d of net year‐on‐year growth might be as much as the global industry can
manage on a sustained basis through 2015. With a ‘call on OPEC crude and stock change’ breaking
through 32 mb/d by 2015 in the Base Case, this is likely to see a narrowing in the margin of spare
capacity from recent 5 mb/d levels to around 3.6 mb/d in 2015, symptomatic of a tightening, and
potentially more jittery, market.

6 10 D ECEMBER 2010
Once again, the reality of a mb/d Medium-Term Oil Market Balance (Lower GDP Case) mb/d
market driven by developments 4.0 8.0
at the margin is demonstrated 3.0 6.0

by comparison with the lower 2.0 4.0
GDP case. Here, weaker 1.0 2.0
demand growth could leave
0.0 0.0
OPEC spare capacity flat around
recent 5 mb/d levels through -1.0 -2.0
2015. As we noted in June -2.0 -4.0

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
however, a 6% margin of supply
Effective OPEC Spare Capacity (RHS) World Demand Growth
flexibility hardly looks like a World Supply Capacity Growth
cause for sharply weakening
markets. Indeed we continue to argue that maintaining this valuable supply cushion should provide the
impetus for sustained investment in both new supplies for the future and ongoing efforts to improve the
efficiency with which oil is used in transportation and industrial markets.

10 D ECEMBER 2010 7

D EMAND I NTERNATIONAL E NERGY A GENCY ‐ O IL M ARKET R EPORT
DEMAND

Summary
• Forecast global oil product demand for 2010 and 2011 is revised up by 130 kb/d and 260 kb/d,
respectively, largely on higher‐than‐expected submissions in OECD North America and non‐OECD
Asia. Global oil demand is now estimated at 87.4 mb/d for 2010 (+2.9% or +2.5 mb/d year‐on‐year),
and is expected to rise to 88.8 mb/d in 2011 (+1.5% or +1.3 mb/d year‐on‐year). Final monthly data
submissions indicate that 3Q10 growth was as high as 3.3 mb/d (+3.8% year‐on‐year), largely driven
by a strong rebound in the OECD, which matched almost exactly non‐OECD growth. In terms of
products, gasoil accounted for 42% of global 3Q10 growth, expanding by over twice as fast as in 2Q07‐
3Q08, and is on track to rise by 4.1% in 2010 – only slightly below the previous two peaks on record
(+4.6% in 1996 and +4.8% in 2004).

• Projected OECD oil demand for 2010 and 2011 is adjusted up by 0.1 mb/d on average, following
slightly stronger‐than‐expected submissions in North America and Europe. In addition, the 2011 US
outlook is nudged up following a reappraisal of gasoline prospects. Nonetheless, total OECD demand,
currently assessed at 45.9 mb/d in 2010 (+1.1% or +500 kb/d year‐on‐year), is still expected to decline
in 2011 (‐0.5% or ‐230 kb/d versus 2010).

Global Oil Demand (2009-2011)
1Q09 2Q09 3Q09 4Q09 2009 1Q10 2Q10 3Q10 4Q10 2010 1Q11 2Q11 3Q11 4Q11 2011
Africa 3.3 3.2 3.2 3.1 3.2 3.2 3.3 3.2 3.2 3.2 3.3 3.4 3.3 3.3 3.3
Americas 29.2 28.9 29.4 29.7 29.3 29.6 30.1 30.7 30.2 30.1 30.0 30.2 30.8 30.6 30.4
Asia/Pacific 25.6 25.8 25.8 26.9 26.0 27.4 27.1 26.8 27.7 27.2 28.1 27.7 27.3 28.3 27.8
Europe 15.6 15.0 15.2 15.1 15.2 14.9 14.8 15.5 15.1 15.1 14.9 14.7 15.3 15.1 15.0
FSU 4.0 3.9 4.1 4.0 4.0 4.2 4.1 4.4 4.2 4.2 4.3 4.2 4.5 4.4 4.4
Middle East 6.8 7.3 7.7 7.1 7.2 7.1 7.5 8.0 7.3 7.5 7.5 7.9 8.3 7.7 7.9
World 84.4 84.2 85.4 85.9 85.0 86.4 87.0 88.6 87.8 87.4 88.0 88.2 89.6 89.3 88.8
Annual Chg (%) -3.2 -2.5 -0.6 0.9 -1.3 2.3 3.3 3.8 2.2 2.9 1.9 1.4 1.1 1.7 1.5
Annual Chg (mb/d) -2.8 -2.2 -0.5 0.8 -1.2 1.9 2.8 3.3 1.9 2.5 1.6 1.2 1.0 1.5 1.3
Changes from last OMR (mb/d) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.19 0.31 0.13 0.08 0.07 0.36 0.53 0.26

• Estimated non‐OECD oil demand for 2010 and 2011 is raised by 90 kb/d on average, mainly on
higher Asian readings. According to preliminary data, Chinese demand soared by an astonishing
+12.6% year‐on‐year in October, driven by extensive use of small‐scale gasoil generators in order to
circumvent government‐mandated closures of coal‐fired electricity plants and compounded by
increased demand from the agricultural sector. Total non‐OECD demand is now projected at
41.5 mb/d in 2010 (+5.0% or +2.0 mb/d year‐on‐year) and 43.1 mb/d in 2011 (+3.7% or +1.6 mb/d
versus 2010).

• Medium‐term global oil product demand is now expected to be 1.1 mb/d higher on average over
2009‐2015 when compared with the Medium‐Term Oil & Gas Markets report, released last June, with
changes primarily related to baseline revisions and higher GDP assumptions, notably for 2010. Overall,
global oil demand is seen rising from 85.0 mb/d in 2009 to 93.4 mb/d in 2015, equivalent to +1.6% or
+1.4 mb/d per year on average (+1.2 mb/d annually post‐2010), a pace of expansion slightly higher
versus June’s MTOGM. Growth comes entirely from non‐OECD economies, which will account for
more than half of global demand as early as 2013, with the gap broadening sharply by 2015
(48.9 mb/d versus 44.5 mb/d for the OECD). Under a ‘lower GDP cum slower efficiency gains’ case,
global demand would increase by a lesser 1.2% or 1.1 mb/d per year on average (+0.8 mb/d post‐
2010), reaching 91.5 mb/d by 2015, a difference of 1.9 mb/d in total versus the base case.

8 10 D ECEMBER 2010
I NTERNATIONAL E NERGY A GENCY ‐ O IL M ARKET R EPORT D EMAND
Global Overview
Following official data submissions for September, the extent of the 3Q10 demand spike has become
clearer. Global oil product demand increased by 3.3 mb/d year‐on‐year (some 0.2 mb/d higher when
compared with our previous report). This rise was largely driven by a strong rebound in the OECD, where
growth roughly doubled from the previous quarter (from +0.7 mb/d in 2Q10 to +1.6 mb/d in 3Q10),
matching almost exactly non‐OECD growth.

World: Total Demand, Y-o-Y Growth Y-o-Y Gasoil Demand Growth
m b/d Actual & F'Cast, mb/d
OECD Non-OECD World
1.0 1.5
4
3 1.0
0.5
2 0.5
1 - -
- (0.5)
(0.5)
(1) (1.0)
(2)
(1.0) (1.5)
(3) 1Q07 3Q07 1Q08 3Q08 1Q09 3Q09 1Q10 3Q10
3Q07 2Q08 1Q09 4Q09 3Q10 OECD Non-OECD World

Gasoil is once again leading global demand growth, accounting for 42% of the total increment in 3Q10.
Moreover, gasoil demand expanded by over twice as fast as in the most recent episode of demand
strength (+5.8% year‐on‐year in 3Q10 versus +2.6% on average over 2Q07‐3Q08, the period when oil
prices began their rapid ascension). Not surprisingly, oil prices reacted accordingly, rising markedly in
3Q10. However, surplus refining capacity, evident since the eruption of the global recession, helped
absorb the surge in gasoil demand. This stands in contrast to 2008, when refining constraints, limited
availability of light sweet crude, low crude production spare capacity, tightening OECD diesel
specifications and booming non‐OECD gasoil demand combined to propel oil prices to record highs.

World: Gasoil Demand Gasoil Demand, Actual & F'Cast
29.5% 120.0% mb/d
14 27
29.0% OECD
80.0% 13 Non-OECD 26
28.5%
World 25
28.0% 40.0% 12
27.5% 24
11
27.0% 0.0% 23
10
26.5% 22
-40.0% 9
26.0% 21
25.5% -80.0% 8 20
1996 1998 2000 2002 2004 2006 2008 2010 7 19
As % of Total Dem and As % of Total Grow th 1997 1999 2001 2003 2005 2007 2009 2011

Gasoil demand growth is expected to moderate only marginally in 4Q10, owing largely to China’s policy‐
driven boost on the back of coal‐fired power shortages. As such, gasoil could account for as much as 65%
of demand growth in this quarter. By end‐year global gasoil demand will have surpassed its pre‐recession
levels (25.2 mb/d in 2010 versus 24.8 mb/d in 2008), and should further increase to 25.8 mb/d in 2011,
representing close to a third of total demand and about 40% of growth. In terms of relative change,
gasoil demand is on track to rise by 4.1% in 2010 – only slightly below the previous two peaks on record
(+4.6% in 1996 and +4.8% in 2004).

10 D ECEMBER 2010 9
Global Oil Demand Growth 2009/2010/2011

thousand barrels per day
North America Europe FSU
246
552
108
-81
-151
21
-229 Asia
-888 1215
Middle East
355
272
220
616 587
-879
Latin America
294 Africa
222 113
41 Global Demand Growth
(mb/d)
7 -1
2009 -1.15 -1.3%
2010 2.47 2.9%
2011 1.33 1.5%

Medium-Term Update
As customary, this report updates our medium‐term demand outlook, last released in mid‐year (Medium‐
Term Oil & Gas Markets, June 2010). Overall, compared with June’s MTOGM, global oil demand is projected
to be some 1.1 mb/d higher on average over the forecast period, rising from 85.0 mb/d in 2009 to
93.4 mb/d in 2015, equivalent to +1.6% or +1.4 mb/d per year on average. Growth – slightly higher than in
the June appraisal – comes entirely from non‐OECD economies (+1.6 mb/d per year on average compared
with ‐0.2 mb/d per year for the OECD). As such, emerging countries will account for more than half of global
demand as early as 2013, with the gap broadening sharply by 2015 (48.9 mb/d versus 44.5 mb/d for OECD
countries), continuing a structural shift that began in the early 2000s.
Global Oil Demand: Oil Demand Sensitivity: Avg. Intensity

m b/d
GDP & Efficiency Sensitivity Change vs. Demand, 2010-15
94 94
-1.5%, 93.8 -3.0%, 93.4 Base
Oil Demand (mb/d)
Base GDP & 3% Avg. Yearly Case

92 Efficiency Gains 92
Low er -2.0%, 91.5 -3.5%, 90.9
Low er GDP & 2% Avg. Yearly
90 Efficiency Gains 90 Case
-2.5%, 89.1 -4.0%, 88.5
88
88
86 -3.0%, 86.8 -4.5%, 86.4
86
84 -1.0% -2.0% -3.0% -4.0% -5.0%
2008 2009 2010 2011 2012 2013 2014 2015 Low er GDP Oil Intensity (%) Base GDP

Even though the global economic recovery has been surprisingly strong so far this year, in addition to our
4.5% per year GDP growth base case (derived from the IMF’s October 2010 outlook), we also maintain our
alternative, ‘lower GDP cum slower efficiency gains’ case. Therein, global GDP growth would expand by only
3% on average – roughly a third less than in the base case. Indeed, the global economy still faces
considerable headwinds that could derail the recovery – including continuing turmoil in Europe, with
sovereign debt defaults now a distinct possibility, sluggish growth and high unemployment in the US, and
overheating and hard‐landing risks in China. We continue to deploy the prevailing futures strip as our pricing
assumption, which remains within a $75‐$85/bbl range for 2010‐2015. In addition, we uphold our belief that
weaker economic expansion would also result in a slower improvement in efficiency, with oil intensity
diminishing by 2% per year over 2010‐2015 – instead of 3% as posited by the base case, broadly reflecting
historical trends. Under the illustrative lower case, global demand would increase by a lesser 1.2% or
1.1 mb/d per year on average to 91.5 mb/d by 2015, a difference of 1.9 mb/d versus the base case.

10 10 D ECEMBER 2010


Medium-Term Update (continued)
Global GDP Growth: Global Oil Demand:

pp Difference vs. Previous MTOMR Difference vs. Previous MTOMR
1.0 kb/d 2009 2010 2011 2012 2013 2014 2015
0.8 1,600
1,400
0.6
1,200
0.4 1,000
0.2 800
- 600
400
(0.2)
200
(0.4) -
2009 2010 2011 2012 2013 2014 2015 (200)
WORLD OECD Non-OECD OECD Non-OECD WORLD

The changes to the oil product demand prognoses are primarily related to baseline revisions and higher GDP
assumptions, notably for 2010. Total revisions, initially roughly evenly split between the OECD and the non‐
OECD, tend to compound slightly for the OECD by the end of the forecast period. This is due to a reappraisal
of oil product demand prospects in OECD North America and the Pacific. On the one hand, projected
gasoline demand in the US is now seen falling at a somewhat slower pace than previously assumed, as the
gains in efficiency resulting from more stringent vehicle standards now look likely to be less immediate. On
the other hand, the prognosis for the Pacific now incorporates a less pronounced decline in residual fuel oil
(‐9% per year instead of ‐14%). Meanwhile, non‐OECD revisions are mainly driven by the Middle East, Asia,
FSU and Latin America.
OECD Demand: Non-OECD Demand:

Difference vs. Previous MTOMR Difference vs. Previous MTOMR
kb/d 2009 2010 2011 2012 2013 2014 2015 kb/d 2009 2010 2011 2012 2013 2014 2015
1,000 1,000
800
800
600
600 400
400 200
-
200
(200)
- (400)
(200) Africa Latin Am erica
China Other Asia
OECD, North Am erica OECD, Europe Non-OECD Europe FSU
OECD, Pacific OECD Middle East Non-OECD

OECD
According to preliminary data, OECD inland deliveries (oil products supplied by refineries, pipelines and
terminals) were virtually flat in October (+0.1% year‐on‐year). As the extremely high temperatures that
prevailed in previous months in OECD Pacific came to an end, the use of residual fuel oil and direct crude
burning for power generation, which had largely sustained demand, receded, compounding a renewed
weakness in distillate demand. In OECD Europe, there was a pause in consumer heating oil re‐stocking,
while demand for light products and fuel oil fell. Only OECD North America (which includes US
Territories) posted healthy oil product demand growth, notably on a continued rebound in distillate
deliveries.

Still, as final official submissions came in, revisions to preliminary data were hefty (+500 kb/d in
September), highlighting the extraordinary and largely unanticipated strength of 3Q10 demand. Indeed,
total OECD demand surged by 3.9% year‐on‐year in September, roughly twice as fast as implied by
10 D ECEMBER 2010 11

preliminary data. In North America (+330 kb/d), US readings once again vastly exceeded adjusted weekly
estimates, especially for gasoline. In Europe (+200 kb/d), distillate demand was much stronger, notably in
Germany and Turkey. In the Pacific, by contrast, overall revisions were insignificant (‐20 kb/d).

OECD Demand based on Adjusted Preliminary Submissions - October 2010
Gasoline Jet/Kerosene Diesel Other Gasoil RFO Other Total Products
mb/d % pa mb/d % pa mb/d % pa mb/d % pa mb/d % pa mb/d % pa mb/d % pa
OECD North Am erica* 10.63 0.5 1.57 -0.6 4.13 10.5 1.00 7.9 0.82 -11.6 5.69 1.11 23.83 2.0
US50 9.06 0.8 1.38 -0.3 3.55 11.1 0.51 11.9 0.46 -7.4 4.21 -1.6 19.18 2.0
Canada 0.73 -0.1 0.11 0.2 0.23 -10.5 0.33 27.0 0.08 13.8 0.74 8.7 2.22 5.3
Mexico 0.77 -2.0 0.04 -12.8 0.29 2.6 0.13 2.6 0.18 -30.9 0.67 12.0 2.08 -1.0
OECD Europe 2.17 -3.5 1.30 0.2 4.52 1.1 1.88 4.2 1.33 -8.1 3.41 -2.5 14.61 -1.1
Germany 0.47 0.7 0.20 -1.5 0.73 7.8 0.49 16.2 0.15 2.7 0.52 -13.2 2.55 1.8
United Kingdom 0.35 -4.6 0.35 0.2 0.43 -2.9 0.11 10.3 0.08 1.4 0.31 -5.4 1.62 -2.2
France 0.18 -7.9 0.13 -11.3 0.70 2.5 0.30 -6.0 0.10 0.8 0.39 -2.0 1.80 -2.2
Italy 0.22 -8.4 0.10 5.0 0.50 -3.9 0.15 -5.6 0.13 -37.7 0.36 -0.9 1.46 -8.0
Spain 0.13 -5.6 0.12 3.1 0.50 0.1 0.18 -3.2 0.19 -6.4 0.31 1.0 1.42 -1.4
OECD Pacific 1.53 -1.1 0.75 -6.8 1.09 -2.9 0.51 -6.6 0.69 7.6 2.75 -6.2 7.31 -3.6
Japan 0.96 -2.3 0.41 -14.1 0.41 -8.1 0.38 -12.5 0.37 0.8 1.45 -9.2 3.98 -7.5
Korea 0.19 -0.7 0.20 3.1 0.29 -2.9 0.13 16.2 0.28 13.0 1.12 -2.5 2.21 0.8
Australia 0.32 -0.1 0.12 5.7 0.34 1.3 0.00 0.0 0.03 -2.0 0.15 -1.5 0.96 0.8
OECD Total 14.33 -0.3 3.62 -1.7 9.74 4.4 3.39 3.4 2.84 -5.9 11.84 -1.7 45.76 0.1
* Including US territo ries

Looking ahead, OECD oil product demand is now estimated at 45.9 mb/d in 2010 (+1.1% or +500 kb/d
year‐on‐year). This is 60 kb/d higher than previously anticipated, largely reflecting a more buoyant
assessment of North America’s prospects in 4Q10. Although this adjustment is mostly carried forward,
OECD demand is still expected to decline in 2011 (‐0.5% or ‐230 kb/d versus the previous year but
150 kb/d higher when compared to our last report).

m b/d OECD: Total Oil Product Demand OECD: Demand by Driver, Y-o-Y Chg
53 Transport Heating
m b/d Pow er Gen. Other
51 Total Dem .
1.0
49 0.5
-
47
(0.5)
45 (1.0)
(1.5)
43
(2.0)
Jan Apr Jul Oct Jan
(2.5)
Range 2005-2009 5-year avg
2009 2010 2007 2008 2009 2010 2011

North America
Preliminary data show oil product demand in North America (including US territories) rising by 2.0% year‐
on‐year in October, following a 4.7% increase in September. Growth has been remarkably strong over
the past two quarters, averaging 3.8% from April to September. If upheld, the weak October preliminary
readings – which stemmed from unseasonably low LPG and residual fuel oil demand in the US and from
weaker gasoline and jet fuel/kerosene readings – would thus signal a notable slowdown. Still, middle
distillate demand has shown few signs of abating, with diesel growing by an estimated 10.5% year‐on‐
year. Yet, even though we have raised slightly our outlook for 4Q10 and 2011, we remain cautious given
less buoyant US weekly data for November.

September data were revised up by 330 kb/d, mostly in the US, highlighting once more the uncertainty
surrounding weekly US data. Weekly to monthly revisions for September went yet again against the

trend of the previous twelve months, confounding our own efforts to anticipate adjustments. For North
America as a whole, gasoline (+170 kb/d) and LPG (+160 kb/d) led the upward adjustments, which were
partly offset by weaker ‘other products’. Part of the total revision has fed through to October
(+210 kb/d), with 4Q10 now seen 140 kb/d higher. North American demand is now estimated at
23.9 mb/d in 2010 (+2.4% or +550 kb/d versus 2009 and 60 kb/d higher than our last report). Demand in
2011 is seen rising slightly, but remains near 23.9 mb/d (+0.1% or +20 kb/d year‐on‐year and 100 kb/d
higher than our last report).

OECD North America: OECD North America: Demand by
m b/d Total Oil Product Demand Driver, Y-o-Y Chg
27 Transport Heating
m b/d Pow er Gen. Other
26 Total Dem .
0.5
25
-
24
(0.5)
23
22 (1.0)
Jan Apr Jul Oct Jan
(1.5)
2009 2010 2007 2008 2009 2010 2011

Adjusted preliminary weekly data to 26 November for the United States (excluding territories) indicate
that inland deliveries – a proxy of oil product demand – grew by only 0.9% in November following a 2.0%
year‐on‐year rise in October. November data featured a sharp year‐on‐year decline in LPG, mostly due to
falling propane deliveries. However, colder weather compared to a warmer‐than‐normal November 2009
helped boost heating oil (+43.1%) and residual fuel oil (+17.6%), while both jet fuel/kerosene (+2.9%) and
diesel (+8.4%) posted solid growth. Though gasoline demand grew by 1.0%, it remains below an
upwardly revised September, when growth was as high as 2.9% (see No Reverse Gear Yet: US Gasoline
Demand Plods Ahead).

US50 Monthly Revisions: MOS vs EIA kb/d US50: LPG Demand
kb/d Weekly, Total Products 2,800
600 2,600
2,400
200
2,200
(200) 2,000
1,800
(600)
1,600
(1,000) 1,400
Jan Apr Jul Oct Jan
5
0
-0
-0
-0
-0
-0
-1

n
n
Ju
Ju
Ju
Ju
Ju
Ju
2009 2010

Mexican oil demand fell by 1.0% year‐on‐year in October, according to preliminary data, largely on
weaker readings for residual fuel oil, gasoline and jet fuel/kerosene, which offset strong gasoil deliveries
(+2.6%). Residual fuel oil demand was sharply lower (‐30.9%) relative to drought‐affected October 2009,
while gasoline declined by 2.0% and jet fuel/kerosene by 12.8%. The persistent weakness in the latter
product has stemmed from the bankruptcy of air carrier Mexicana last August. The airline accounted for
almost one‐third of Mexico’s domestic airline capacity and over 15% of international flights. A
restructuring plan seeks to renew flights by mid‐January, though initial capacity may be much lower than
pre‐bankruptcy levels. Although other domestic airlines and US carriers are increasing flights to help
meet demand, we have trimmed our jet fuel/kerosene outlook by 10 kb/d and 5 kb/d for 4Q10 and 2011,
respectively. Should efforts to restore capacity falter, this prognosis could be further revised down.

kb/d Mexico: Residual Fuel Oil Demand kb/d Mexico: Jet Fuel & Kerosene Demand
450 75
400 70
65
350
60
300
55
250
50
200 45
150 40
Jan Apr Jul Oct Jan Jan Apr Jul Oct Jan
Range 2005-2009 5-year avg Range 2005-2009 5-year avg
2009 2010 2009 2010

No Reverse Gear Yet: US Gasoline Demand Plods Ahead
The resilience of US gasoline demand has been a surprise in recent months. Even though growth over the
June‐August summer driving season was 1.2% year‐on‐year higher when compared to 2009, demand was
still 220 kb/d below the 2007 summer. Yet an upward revision to September demand (+175 kb/d) has
blunted the normally sharp seasonal fall that occurs after summer’s end – over the previous ten years,
gasoline demand fell on average by 450 kb/d from August to September, versus just 230 kb/d this year. Part
of this strength may derive from a relatively late Labor
Day holiday weekend, but it also stems from rising kb/d US50: Motor Gasoline Demand
vehicle‐miles travelled (VMTs), which grew by 1.6% 9,700
year‐on‐year in both August and September. Since the 9,500
start of the economic downturn, VMTs have held up 9,300
better than gasoline demand; as such, recent gains in
the latter may reflect a degree of catching‐up. 9,100
8,900
However, the narrowing gap between gasoline demand
and VMTs may also signal slower efficiency gains for the 8,700
US vehicle fleet. While we still expect improved vehicle 8,500
efficiency to reduce gasoline use over the medium‐term, Jan Apr Jul Oct Jan
we have slowed the pace of demand decline from our 2009 2010
June forecast, based on lower‐than‐expected fleet
turnover in 2010. Through November, light vehicle sales have grown by 9% year‐on‐year on average, but
current sales (at just over 12 million vehicles per month) remain far below pre‐crisis readings (16‐17 million
per month). In addition, sales have recently begun again favouring less efficient light trucks versus passenger
cars, with the former accounting for 52% of vehicle purchases over the past three months.
Jan US50: Gasoline Demand vs Vehicle mn US50: Vehicle Sales, Seasonally Adj
03=100 Miles Travelled, Seasonally Adj 10
108 9
106 8
104 7
102 6
100 5
Source: BEA
98 4
Gasoline demand VMTs Autos Light Trucks

Even though it is impossible to appraise the US vehicle fleet’s current average size and efficiency, our
analysis suggests that the fleet’s fuel economy may have increased by less than expected in 2010 versus
2009. As such, our short and medium‐term demand forecasts have been adjusted upwards. While 2011
gasoline demand is now seen largely flat relative to 2010, the pace of decline from 2012‐2015 now stands at
‐0.6% annually, versus ‐0.8% previously.

Europe
Preliminary inland data indicate that oil product demand growth in Europe declined by 1.1% year‐on‐
year in October, as somewhat weaker heating oil deliveries (+4.2%, compared with double‐digit growth
in the previous three months) failed to offset losses in the lighter end of the barrel (LPG, naphtha and
gasoline) and in residual fuel oil. Meanwhile, revisions to September preliminary demand data
(+200 kb/d) were driven by stronger‐than‐expected distillate deliveries, notably in Germany and Turkey.
Overall, demand increased by +1.9% in September, almost three times as much as suggested by
preliminary readings, thus contributing to raise annual estimates. Oil product demand in OECD Europe is
now assessed at 14.4 mb/d in 2010 (‐0.8% or ‐120 kb/d compared with the previous year and 10 kb/d
higher than previously expected), declining further in 2011 to 14.3 mb/d (‐0.7% or ‐100 kb/d versus
2010, and 50 kb/d higher versus last month’s report).

OECD Europe: OECD Europe: Demand by Driver,
m b/d
Total Oil Product Demand Y-o-Y Chg
16.5 Transport Heating
16.0 m b/d Pow er Gen. Other
Total Dem .
15.5 0.2
15.0 -
14.5 (0.2)
14.0 (0.4)
13.5 (0.6)
13.0
(0.8)
Jan Apr Jul Oct Jan
(1.0)
2009 2010 2007 2008 2009 2010 2011

Watching the Mercury
Very low temperatures in northern Europe during November and early December have prompted some
analysts to revise up their winter 2010/2011 heating demand estimates. However, with perennial
uncertainties over the duration of colder‐than‐normal weather, and the fact that OECD oil use for heating
and power generation is in any case structurally declining, we are not tempted to change our outlook at this
time.
A simple examination of the five coldest first quarters over the last decade suggests that OECD oil demand
estimates have been prone to sharp swings, ranging from zero to 350 kb/d versus the original forecast for
that quarter whenever heating‐degree days (HDDs) have been 5% higher than normal on average. Yet, given
structural interfuel substitution, the weather impact has receded over time.
Taking 1Q10 as a more representative example, when HDDs in the OECD were 7.7% higher than the ten‐year
average, our oil demand estimate for the OECD was adjusted up by only 0.3% from the original forecast. A
recurrence of that trend in 1Q11, should temperatures remain very low for the entire quarter, might
therefore add only around 140 kb/d to OECD demand – or even less, since oil is unlikely to compete against
cheap natural gas. As such, we continue to forecast demand assuming that average temperatures in the
OECD will revert to their ten‐year trend, and therefore have made no significant upward adjustment on the
basis of recent low temperatures.

Heating oil deliveries in Germany, the region’s largest user, increased by ‘only’ 16.2% year‐on‐year –
almost two‐thirds less than in September (revised up to +43.6%). Consumer stocks stood at 63% of
capacity, slightly higher than in September (62%) but somewhat below the five‐year average.
Meanwhile, LPG and naphtha deliveries fell sharply (‐14.2% and ‐16.8%, respectively). The LPG fall is
probably related to high propane and butane prices, following maintenance at various gas‐processing
facilities across Europe. Oddly, this failed to translate into greater naphtha use. This could be due to
limited availability of naphtha‐running units and to rising naphtha prices as a result of the French strikes.

kb/d Germany: Heating Oil Demand kb/d Germany: Naphtha Demand

800 490
700
440
600
500 390
400
340
300
200 290
2009 2010 2009 2010

In France, meanwhile, the effects of October’s social unrest were evident in jet fuel/kerosene demand,
which plummeted by 11.3% year‐on‐year (given strikes by air traffic controllers, compounded by supply
disruptions by oil refinery workers). By contrast, diesel demand actually rose by 2.5%; arguably, panic
buying in the first half of the month more than offset the shortages of the second half (which, in
addition, were largely concentrated in western France, although the Paris metropolitan area was also
badly affected). Finally, the weakness in residual fuel oil delivery was largely concentrated in Italy, where
natural gas has become the fuel of choice for power generation.

kb/d France: Jet Fuel & Kerosene Demand kb/d Italy: Residual Fuel Oil Demand
170 500
160
400
150
300
140
200
130
120 100
2009 2010 2009 2010

Pacific
Preliminary data show that oil product demand in the Pacific tumbled by 3.6% year‐on‐year in October,
as the heat wave that prevailed in the previous months subsided, removing support for oil‐based power
generation. As such, the pace of growth of residual fuel oil demand softened markedly (+7.6% versus
+22.0% in September), while direct crude burning (included in ‘other products’) plummeted (‐27.4%
compared with +22.8% in the previous month).

OECD Pacific: OECD Pacific: Demand by Driver,
m b/d
Total Oil Product Demand Y-o-Y Chg
10.0 Transport Heating
9.5 m b/d Pow er Gen. Other
Total Dem .
9.0 0.15
8.5 -
8.0 (0.15)
7.5 (0.30)
7.0 (0.45)
Jan Apr Jul Oct Jan
(0.60)
2009 2010 2007 2008 2009 2010 2011


A seasonal drop in gasoline and distillate deliveries in Japan further compounded the slowdown. It is
worth noting that LPG demand also plunged (‐15.8%), notably in Japan and Korea. As in Europe, this
could be related to higher prices for propane and butane, relative to naphtha, but could also signal a
renewed bout of weakness of the region’s petrochemical industry, which faces increasing competition
from other areas. Revisions to preliminary September data, meanwhile, were minimal (‐20 kb/d).
Consequently, the outlook for total OECD Pacific demand remains virtually unchanged, at 7.7 mb/d in
2010 (+0.9% or +70 kb/d year‐on‐year) and 7.6 mb/d in 2011 (‐2.0% or ‐150 kb/d).

OECD Pacific: m b/d OECD Pacific: LPG Demand

m b/d Other Products Demand 1.05
0.9
0.8 0.95
0.7
0.6 0.85
0.5
0.75
0.4
0.3 0.65
2009 2010 2009 2010

Non-OECD
Preliminary demand data show that non‐OECD demand growth accelerated markedly in October (+5.2%
year‐on‐year). Growth was buoyant across all product categories bar LPG, and continued to be led in
absolute terms by gasoil (roughly a third of total oil product demand growth), although jet fuel/kerosene
posted the highest relative increase.
Non-OECD: Demand by Product
(tho usand barrels per day)
D e m a nd A nnua l C hg ( k b/ d) A nnua l C hg ( %)
Aug-10 Sep-10 Oct-10 Sep-10 Oct-10 Sep-10 Oct-10
LPG & Ethane 4,312 4,371 4,118 212 -69 5.1 -1.6
Naphtha 2,828 2,845 2,850 113 143 4.1 5.3
Motor Gasoline 7,920 7,957 8,072 224 317 2.9 4.1
Jet Fuel & Kerosene 2,719 2,770 2,830 178 249 6.9 9.6
Gas/Diesel Oil 12,637 12,644 13,040 490 671 4.0 5.4
Residual Fuel Oil 5,607 5,747 5,555 400 327 7.5 6.3
Other Products 5,943 5,920 5,550 93 435 1.6 8.5
Total Products 41,966 42,254 42,015 1,709 2,073 4.2 5.2

On a regional basis, oil demand growth in Asia dwarfed that of all other regions. At almost +1.3 mb/d or
+6.7% year‐on‐year, Asian demand growth in October was almost a third higher than in September.
China, with +1.1 mb/d, accounted for 87% of Asian growth and for almost half of non‐OECD growth.
Looking ahead, non‐OECD demand is expected to reach 41.5 mb/d in 2010 (+5.0% or +2.0 mb/d year‐on‐
year and 70 kb/d higher than previously anticipated), rising further in 2011 to 43.1 mb/d (+3.7% or
+1.6 mb/d versus the previous year and 110 kb/d higher when compared to our last report).

Non-OECD: Demand by Region
Aug-10 Sep-10 Oct-10 Sep-10 Oct-10 Sep-10 Oct-10
Africa 3,225 3,250 3,211 56 85 1.8 2.7
Asia 19,020 19,587 20,046 841 1,255 4.5 6.7
FSU 4,453 4,488 4,206 358 263 8.7 6.7
Latin America 6,446 6,422 6,433 299 259 4.9 4.2
Middle East 8,113 7,765 7,401 154 230 2.0 3.2
Non-OECD Europe 709 741 719 0 -19 0.0 -2.6
Total Products 41,966 42,254 42,015 1,709 2,073 4.2 5.2

China
China’s preliminary data show that apparent oil demand rose by +12.6% year‐on‐year in October, with all
product categories bar LPG featuring strong gains. This pace of expansion is roughly twice as fast as in
September (+6.2%), seemingly putting to rest the widespread assumption that oil demand growth would
noticeably slow down in 2H10 (and resulting in a +0.3 mb/d 4Q10 revision versus our last report).

Admittedly, as noted last month, the current demand strength is largely related to a surge in gasoil
consumption (+8.9% year‐on‐year in October). It has been driven by extensive use of small‐scale
electricity generators in order to circumvent closures of coal‐fired plants imposed by local governments –
in a last‐ditch effort to meet the country’s ambitious target to reduce energy intensity as the end of the
11th Five‐Year Plan (2006‐2010) approaches – and has led to gasoil shortages in several provinces. The
tightness has been further exacerbated by increased gasoil demand from the agricultural sector, as the
harvesting season begins. Interestingly, the gasoil shortages have also helped revive residual fuel oil
demand (+45.1%), presumably because independent ‘teapot’ refineries have found it advantageous to
refine this feedstock and produce off‐spec gasoil, despite high fuel oil import taxes. By contrast, it
remains unclear whether the recent price hike will be sufficient to prompt state‐owned companies to
boost gasoil yields significantly, despite increasing refinery runs. In the meantime, the rise in gasoil
demand has also partly been met by stock draws, with inventories falling by almost 5.6 mb or 11%
month‐on‐month. In addition, some observers reckon that China may have become again a net gasoil
importer in November for the first time in two years.

kb/d China: Gasoil Demand kb/d China: Residual Fuel Oil Demand
3,300 1,100
1,000
3,100
900
2,900 800
2,700 700
2,500 600
500
2,300 400
2,100 300
2009 2010 2009 2010

The strength of China’s oil demand is consistent with other indicators suggesting that the economy is in
danger of overheating. Not only does GDP growth continue to hover around the 10% mark, but inflation
is also creeping up. The official headline inflation (+4.4% year‐on‐year in October) hides the fact that
food prices have sharply risen (vegetables are up by over 60%, according to some estimates), which
could herald rising domestic tensions if left unchecked. The government has reacted by announcing a
series of price controls targeting several commodities, and has vowed to fight ‘speculators’.

China: Demand by Product
2009 2010 2011 2010 2011 2010 2011
LPG & Ethane 738 723 711 -15 -12 -2.1 -1.7
Naphtha 952 1,219 1,297 267 78 28.1 6.4
Motor Gasoline 1,507 1,557 1,653 50 96 3.3 6.2
Jet Fuel & Kerosene 335 380 409 46 29 13.7 7.5
Gas/Diesel Oil 2,699 2,987 3,152 288 165 10.7 5.5
Residual Fuel Oil 580 535 478 -45 -57 -7.8 -10.6
Other Products 1,559 1,849 1,995 289 146 18.6 7.9
Total Products 8,369 9,250 9,695 881 446 10.5 4.8


More importantly, as far as oil demand is concerned, is whether such administrative measures will
succeed in curbing inflation – or whether the government will be obliged to tackle the main cause of
inflation, namely runaway bank lending, and by doing so inadvertently engineer a hard economic
landing. Indeed, recent efforts to tighten monetary policy have mostly focused on raising banks’ reserve
requirements. Bank lending, by contrast, is on track to average some $110 billion per month this year,
despite two recent interest rate raises – well ahead of the government’s yearly target (about $1.1 trillion
at current exchange rates) and almost equivalent to the US QE2. We are not factoring in such a potential
hard landing at this point – oil demand is still expected to rise by 4.8% or 450 kb/d year‐on‐year in 2011,
120 kb/d higher than in our last report – but if it were to occur, it would surely curb oil use sharply.

Other Non-OECD
According to preliminary data, gasoline demand in Iran plunged by 18.1% in September, possibly
reflecting supply problems despite the government’s claims that petrochemical‐based gasoline
production has helped largely to offset import restrictions. As such, 3Q10 gasoline demand was down by
almost 60 kb/d quarter‐on‐quarter, mimicking a similar fall in 2007 following the introduction of the
rationing scheme.

kb/d Iran: Motor Gasoline Demand kb/d Iran: Motor Gasoline Demand
550 500
500
450
450
400
400
350 350
300
300
Jan Apr Jul Oct Jan
Range 2005-2009 5-year avg 1Q 2Q 3Q 4Q
2009 2010 2007 2008 2009 2010

Meanwhile, the Iranian government has once again postponed the implementation of oil product
subsidy‐removal legislation, voted in January and due to begin by late October (having been already
delayed from late September). Aside from the technical challenges – handing targeted cash handouts, as
a compensation for the withdrawal of subsidies, to some 61 million Iranians (out of a population of
73 million) – the main obstacle is allegedly political, as the probable surge in inflation and likely social
protests could significantly weaken the current administration. It thus remains to be seen whether these
demand management measures will be put in place at the end of the Iranian month of Azar, which
begins on 22 November, as announced, or whether they will be postponed again – perhaps indefinitely.

Iran: Demand by Product
2009 2010 2011 2010 2011 2010 2011
LPG & Ethane 270 271 282 1 10 0.4 3.9
Naphtha 55 55 58 -1 3 -1.0 6.3
Motor Gasoline 403 384 399 -19 15 -4.7 3.9
Jet Fuel & Kerosene 118 117 118 -1 1 -0.8 0.9
Gas/Diesel Oil 532 521 555 -11 34 -2.2 6.6
Residual Fuel Oil 311 325 336 13 11 4.3 3.5
Other Products 142 139 141 -2 1 -1.5 0.8
Total Products 1,832 1,812 1,889 -20 77 -1.1 4.2


S UPPLY I NTERNATIONAL E NERGY A GENCY ‐ O IL M ARKET R EPORT
SUPPLY

Summary
• Global oil supply rose by 400 kb/d to 88.1 mb/d in November, its highest‐ever level, largely on
increased non‐OPEC production. Global output is up by 1.6 mb/d over year‐ago levels, of which half
stems from higher non‐OPEC supply, one‐third from OPEC NGLs and one‐sixth from OPEC crude.

• OPEC crude oil production in November was marginally higher, up by 45 kb/d to 29.2 mb/d. OPEC
ministers are unlikely to address output targets at their meeting on 11 December in Quito, Ecuador.
Against a backdrop of much stronger‐than‐expected global oil demand growth, however, OPEC may
come under pressure to increase supplies to the market in the new year if prices continue their
relentless rise. The ‘call on OPEC crude and stock change’ for 2011 is raised by 100 kb/d this month, to
an estimated 29.5 mb/d, on higher demand projections.

• Non‐OPEC supply is estimated at 53.4 mb/d in November, up 300 kb/d versus October levels, on
higher Canadian and Kazakhstani output post‐maintenance, and rising Brazilian crude following
safety‐related platform shut‐ins. Non‐OPEC output averages 52.8 mb/d for 2010 and 53.4 mb/d in
2011, representing growth of 1.1 mb/d and 600 kb/d, respectively. OPEC gas liquids supply rises by
0.5 mb/d in both 2010 and 2011, to average 5.8 mb/d next year.

• An updated medium‐term outlook sees global supply capacity rising from 91.4 mb/d in 2009 to
98 mb/d by 2015. The total is 1.5 mb/d higher than in the June MTOGM, largely due to improved non‐
OPEC supply prospects, while lower OPEC NGL capacity estimates offset now slightly higher OPEC
crude capacity projections.

• OPEC crude capacity is expected to increase by 2.1 mb/d, to 36.9 mb/d, by 2015 while OPEC’s
condensate and natural gas liquids (NGL) capacity is now forecast to rise by 2.3 mb/d to 7.1 mb/d over
the same period.

• Non‐OPEC supply growth by 2015 is more than doubled compared to the June MTOGM, to
2.3 mb/d, with total output seen rising from 51.7 mb/d in 2009 to 54.0 mb/d in 2015. A significantly
brighter outlook for US onshore and unconventional crude as well as gas liquids more than offsets the
impact of protracted drilling delays in the Gulf of Mexico. Chinese and Russian supply prospects are
also revised up, while slippages adversely impact Canadian oil sands projects.

OPEC and Non-OPEC Oil Supply OPEC and Non-OPEC Oil Supply
mb/d Year-on-Year Change m b/d m b/d
(OPEC Current Membership)
4 60 30.0
3
2 58
29.5
1 56
0 29.0
-1 54
-2 52 28.5
-3
-4 50 28.0
Aug 09 Nov 09 Feb 10 May 10 Aug 10 Nov 10 Aug 09 Feb 10 Aug 10 Feb 11 Aug 11
OPEC Crude Non-OPEC Non-OP EC OP EC NGLs
OPEC NGLs Total Supply OP EC Crude - RS

All world oil supply figures for November discussed in this report are IEA estimates. Estimates for OPEC
countries, Alaska, Peru and Russia are supported by preliminary November supply data.


I NTERNATIONAL E NERGY A GENCY ‐ O IL M ARKET R EPORT S UPPLY
Note: Random events present downside risk to the non‐OPEC production forecast contained in this report.
These events can include accidents, unplanned or unannounced maintenance, technical problems, labour strikes,
political unrest, guerrilla activity, wars and weather‐related supply losses. Specific allowance has been made in
the forecast for scheduled maintenance in all regions and for typical seasonal supply outages (including
hurricane‐related stoppages) in North America. In addition, from July 2007, a nationally allocated (but not field‐
specific) reliability adjustment has also been applied for the non‐OPEC forecast to reflect a historical tendency
for unexpected events to reduce actual supply compared with the initial forecast. This totals ‒410 kb/d for non‐
OPEC as a whole, with downward adjustments focused in the OECD.

OPEC Crude Oil Supply
OPEC crude oil production in November was marginally higher, up by 45 kb/d to 29.24 mb/d. Increased
supplies from Saudi Arabia, Iraq, Qatar and Iran totalling 185 kb/d were partially offset by an 80 kb/d
drop in Nigeria, combined with smaller declines of 10‐30 kb/d from the remaining member countries.

Crude oil production by OPEC‐11 was pegged at 26.76 mb/d in November, unchanged from the previous
month. The group is now producing about 1.9 mb/d above its 24.845 mb/d output target. Relative to
targeted output cuts, OPEC’s compliance rate was also unchanged at 54% in November.

Quarterly Call on OPEC Crude + mb/d OPEC Crude Oil Production
m b/d
Stock Change 32
31
31
30
30
29
29
28
28
27
1Q 2Q 3Q 4Q Jan Mar May Jul Sep Nov Jan
2009 2 0 10 2 0 11 2007 2008 2009 2010
Entire series based o n OP EC Co mpo sitio n as o f January 2009 Entire series based on OPEC Composition as of January 2009
o nwards (including A ngo la & Ecuado r & excluding Indo nesia) onwards (including Angola & Ecuador & excluding Indonesia)

However, OPEC ministers are unlikely to address compliance issues or target allocations at their meeting
on 11 December in Quito, Ecuador. Pre‐meeting statements by OPEC ministers suggest the group is
planning on a quick agreement to roll over existing output targets, despite the unexpected jump in global
oil demand in second‐half 2010 and sharp price increases since they last met on 14 October. Early
December prices were around $92/bbl for Brent and $90/bbl for WTI, about $10‐12/bbl above average
October levels.

Against a backdrop of much stronger‐than‐expected global oil demand growth and oil prices above two‐
year highs, OPEC may come under pressure to increase supplies to the market in the new year. Our ‘call
on OPEC crude and stock change’ for 2011 is raised by 100 kb/d this month, to an estimated 29.5 mb/d
on higher demand projections, equating to about 260 kb/d above the group’s current production levels.
OPEC has not revised it output targets since end‐2008, when the group agreed to cut supplies by a
further 2.2 mb/d, effective January 2009, bringing total reductions to 4.2 mb/d since September 2008.

Saudi Arabia’s crude oil production averaged 8.34 mb/d for November, up 100 kb/d from October. The
November supply assessment is still below some other industry estimates, which see Saudi supplies
higher in recent months based on divergent views of crude exports.


Iran also raised output in November, up by 20 kb/d to 3.72 mb/d. Iran appears to have reduced the
number of unsold cargoes in floating storage again in November, with volumes held in tankers now
estimated at 21.7 mb at end‐November compared with 23.6 mb the previous month, according to
Gibson Shipbrokers.

Iraqi output rose by 45 kb/d to 2.48 mb/d in November, in part due to an absence of insurgent attacks
on infrastructure over the month. Crude oil exports were estimated at 1.93 mb/d in November, with
slightly higher northern volumes offsetting a modest decline on southern shipments. Exports of Kirkuk
crude were up by 10 kb/d, to 410 kb/d while volumes from Basrah terminals were down by 20 kb/d to
1.52 mb/d. Iraqi production estimates include 585 kb/d of crude used for refinery operations and at
power plants, as well as an estimated 35 kb/d of output in the Kurdish region of the country, less 70 kb/d
of products spiked into to crude flows.

By contrast, Nigerian supplies were down in November following a surge in militant activity in the
volatile Niger Delta region. Nigerian crude output fell by 80 kb/d to 2.12 mb/d, in large part due to an
attack on the key Trans‐Niger pipeline disrupting supplies of Bonny crude.

A wave of kidnappings is also threatening efforts to restore shut‐in production as companies put staff in
remote locations, where they are vulnerable to attacks by militants. Even offshore oil operations and
workers have become targets following the kidnapping of eight staff and forced shut‐in of 45 kb/d at the
Oso deepwater oil platform on 14 November. The captives were later freed when Nigerian security
forces rescued a total of 19 hostages from numerous kidnappings held at a camp in the mangrove creeks
on 17 November. Rebels were quick to announce that they plan more hostage‐taking.

Angolan output fell by 20 kb/d, to 1.66 mb/d, due to technical issues at several fields. Problems emerged
as the Dalia FPSO was being brought back on line following scheduled maintenance. The Greater
Plutonio complex is still producing well below capacity due to ongoing repairs to its water
injection system.

OPEC Crude Production
Sustainable Spare Capacity
Sep 2010 Oct 2010 Nov 2010 OPEC Percent Compliance
Production vs Oct 2010
Supply Supply Supply 1 Target Cuts with Volume Cuts
Capacity Supply
Algeria 1.27 1.27 1.27 1.38 0.11 0.200 50%
Angola 1.65 1.68 1.66 2.00 0.34 0.244 33%
Ecuador 0.46 0.47 0.47 0.48 0.01 0.067 42%
Iran 3.68 3.70 3.72 3.90 0.18 0.562 16%

2 2.30 2.30 2.29 2.60 0.31 0.374 86%
Kuwait
Libya 1.55 1.56 1.56 1.75 0.19 0.252 56%
Nigeria3 2.15 2.20 2.12 2.40 0.28 0.319 0%
Qatar 0.80 0.80 0.82 1.00 0.18 0.122 33%
Saudi Arabia2 8.28 8.24 8.34 12.20 3.86 1.318 84%
UAE 2.31 2.33 2.32 2.70 0.38 0.379 87%
Venezuela4 2.23 2.21 2.19 2.42 0.23 0.364 49%
OPEC-11 26.68 26.76 26.76 32.83 6.07 4.201 54%

Iraq 2.52 2.44 2.48 2.55 0.07
Total OPEC 29.20 29.19 29.24 35.38 6.14

(excluding Iraq, Nigeria, Venezuela 5.56)
1 Capacity levels can be reached within 30 days and sustained for 90 days.
2 Includes half of Neutral Zone production.
3 Nigeria's current capacity estimate excludes some 0.5 mb/d of shut-in capacity.
4 Includes upgraded Orinoco extra-heavy oil assumed at 430 kb/d in November.


Medium-Term OPEC Capacity on Track to Increase to 36.9 mb/d by 2015
OPEC crude capacity is expected to increase by 2.09 mb/d, to 36.94 mb/d, from 2009 to 2015. This
represents a revision of 150 kb/d from the 1.94 mb/d expansion envisaged last June. The prospect for an
improved geopolitical outlook in the medium term for both Iraq and Nigeria is largely behind the
upward revision.
By contrast, an escalation in international sanctions mb/d OPEC Crude Oil Production Capacity
imposed on Iran in the third quarter prompted a 37.5
downward revision in the country’s outlook, partially 37.0
offsetting the gains from Iraq and Nigeria. 36.5
36.0
One issue that is increasingly threatening project
35.5
timelines is the growing insertion of ‘local content’
35.0
clauses in contracts by a number of countries. While on
34.5
paper the intent is laudable, in practice finding qualified
34.0
local contractors for what have become increasingly
complex developments has led to considerable delays 33.5
in a number of projects, especially in Nigeria, Angola, 2009 2010 2011 2012 2013 2014 2015
Algeria and Libya. Previous Current
OPEC’s condensate and natural gas liquids (NGL) capacity is now forecast to rise by 2.26 mb/d to 7.06 mb/d
by 2015. That represents a decrease of around 325 kb/d from our June forecast, with Iran and Saudi Arabia
accounting for the bulk of the revision.
Key capacity changes are as follows:
Iraq will account for just over 50% of the increase, rising by 1.13 mb/d to reach 3.62 mb/d capacity
by 2015. That is about 167 kb/d above the June projection. The slightly higher forecast reflects in
large part the long‐awaited political progress. After more than a six‐month delay, the formation of a
new government is expected to help improve the bureaucratic logjam impacting upon the
operating environment. Several companies are also logging tangible increases in field production,
especially at the Rumaila and Zubair fields. As always, formidable challenges remain, with a lack of
much‐needed infrastructure on the ground, technical problems such as water reinjection and
logistical obstacles continuing to constrain our outlook below official government forecasts.
In Nigeria, the production outlook has marginally improved as companies continue to restore long‐
shut‐in production. The 14‐month ceasefire period enabled companies to repair some long‐
damaged infrastructure and raise production to more than 2.2 mb/d earlier this year. Nigerian
crude production capacity is expected to increase by 130 kb/d, to 2.79 mb/d by 2015. That
represents an upward revision of around 225 kb/d. Equally important, while companies remain
concerned over the proposed new ‘Petroleum Industry Bill’ (PIB), several key projects are moving
forward as planned. The next big deepwater project to come online is the Total‐operated 180 kb/d
Usan field in 2013 followed by the 200 kb/d Egina field in 2014.
Our medium‐term outlook will rise or fall on the government’s success in maintaining the fragile
ceasefire accord with former militants as well as adoption of new energy legislation that does not
discourage foreign investment. Despite repeated announcements over the past six months that
legislators would soon vote into law the new PIB, a final agreement now looks set to be delayed
until after the April elections. While political instability continues to threaten the near‐term outlook
for Nigerian production, we assume for our forecast that a positive outcome will prevail, allowing
capacity expansion plans to move forward. Projects awaiting a final investment decision but not
included in our forecast include the 135 kb/d Bosi deepwater field and the 110 kb/d Uge field.
By contrast, the worsening crisis with Iran over its nuclear ambitions and new sanctions imposed
since our last update, have prompted a downgrade in the country’s oil outlook. Our assumed
Iranian production decline has been intensified since June, with capacity now expected to fall by
810 kb/d, to 3.1 mb/d by 2015. Sanctions have largely stymied participation by IOCs in new projects
but, equally, our outlook has also been downgraded on expectations of higher decline rates as the
country struggles to secure needed technology and equipment.


Medium-Term OPEC Capacity on Track to Increase to 36.9 mb/d by 2015 (continued)
Algeria’s production capacity has also been scaled back from the June forecast, with capacity now
largely expected to remain unchanged over the 2009‐15 period, at around 1.37 mb/d. The 65 kb/d
downward revision from June is due in part to the unexpected, lengthy paralysis at the top
management level following the massive corruption scandal that swept through the state oil
company at the beginning of 2010. Bureaucratic delays apparently worsened over the year as new
management reviewed contracts already awarded which, in turn, has stalled development
timelines. In addition, existing unattractive contract terms for technically challenging EOR projects
continue to derail capacity expansion plans. With the dust from the scandal still settling it is unclear
if Algeria will resume its plans to increase capacity or hold it flat and focus solely on its gas industry.

Estimated Average Sustainable Crude Production Capacity
Increment
2009 2010 2011 2012 2013 2014 2015 09 - 15
Algeria 1.37 1.35 1.33 1.39 1.42 1.42 1.37 0.00
Angola 2.08 2.01 1.90 2.00 2.16 2.33 2.49 0.41
Ecuador 0.50 0.50 0.50 0.51 0.51 0.48 0.46 (0.04)
Iran 3.92 3.87 3.70 3.55 3.48 3.31 3.10 (0.81)
Iraq 2.49 2.50 2.65 2.89 3.17 3.56 3.62 1.13
Kuwait 2.64 2.59 2.54 2.51 2.54 2.64 2.64 (0.00)
Libya 1.77 1.78 1.81 1.78 1.77 1.94 2.02 0.24
Nigeria 2.66 2.69 2.70 2.64 2.58 2.67 2.79 0.13
Qatar 0.97 1.01 1.00 1.00 0.98 0.99 1.03 0.06
Saudi Arabia 11.23 12.08 12.04 11.82 11.63 11.60 11.59 0.36
UAE 2.72 2.70 2.71 2.89 3.05 3.14 3.22 0.50
Venezuela 2.51 2.42 2.33 2.33 2.38 2.59 2.62 0.11
OPEC-11 32.37 33.00 32.57 32.42 32.50 33.10 33.32 0.95
Total OPEC 34.86 35.50 35.22 35.31 35.67 36.67 36.94 2.09

Growth in OPEC NGLs Slowed
OPEC NGLs production estimates have been revised down by around 325 kb/d from the June report, with
Iran accounting for 35% of the revisions again due to the tighter sanctions regime. Iranian NGLs are now
forecast to grow by 413 kb/d to 927 kb/d. As before, Qatar will provide the single biggest increment over the
five‐year period, up by 656 kb/d to 1.36 mb/d. However, Saudi Arabia remains the largest OPEC supplier of
NGLs, with growth of just under 300 kb/d pushing volumes to 1.86 mb/d.

Estimated Average Sustainable Condensate & NGL Production Capacity
(thousand barrels per day)
Increment
2009 2010 2011 2012 2013 2014 2015 09 - 15
Algeria 627 667 705 709 731 736 754 127
Angola 50 50 50 85 92 86 80 30
Ecuador 2 2 1 1 1 0 0 (2)
Iran 514 540 578 691 768 871 927 413
Iraq 42 56 59 64 68 73 74 32
Kuwait 190 195 205 223 308 320 320 130
Libya 115 111 111 111 120 158 202 86
Nigeria 273 355 359 399 420 421 410 137
Qatar 699 927 1,113 1,227 1,252 1,292 1,355 656
Saudi Arabia 1,568 1,640 1,710 1,765 1,835 1,845 1,860 292
UAE 515 537 739 776 808 869 862 347
Venezuela 210 211 213 213 214 215 216 6
Total OPEC 4,806 5,292 5,843 6,264 6,618 6,887 7,062 2,256

Non-OPEC Overview
Non‐OPEC supply rose by 0.3 mb/d to 53.4 mb/d in November, its highest this year, with output from
Canadian oil sands and Kazakhstan rising following maintenance, and increased Brazilian crude
production following safety‐related platform shut‐downs. Year‐on‐year, non‐OPEC oil supply is 0.8 mb/d
higher, with stronger US onshore production, higher Canadian, Russian, Chinese and Brazilian output.

Numerous changes to baseline and expectations have affected the overall forecast. Non‐OPEC supply in
2010 is now seen 175 kb/d higher than previously, at 52.8 mb/d. A reappraisal of refinery processing
gains lifts 2010 levels by 105 kb/d, which is carried through the forecast (see Processing Gains Update in
the Refining section). US 2010 production is also raised by 55 kb/d, largely due to the hurricane season
ending without any further storm impact, while Sudan’s baseline is lifted by a further 50 kb/d. Offsetting
downward adjustments stem from the North Sea and Australia, and marginally lower expected volumes
from Latin America.

mb/d Non-OPEC Total Oil Supply mb/d Non-OPEC Supply - Yearly Change
54.5 2.0
53.5 1.5
1.0
52.5
0.5
51.5
0.0
50.5
-0.5
49.5 -1.0
Jan Mar May Jul Sep Nov Jan 1Q10 3Q10 1Q11 3Q11
2008 2009 NAM OECD EUR FSU
2010 2010 forecast China Other Asia LAM
2011 forecast PG & Biofuels Other Total

Estimated non‐OPEC supply for 2011 is adjusted 55 kb/d higher in total, to 53.4 mb/d. US Gulf of Mexico
crude output is revised down as drilling delays are expected to lengthen (see Longer Drilling Delays Seen
in Gulf of Mexico below). Latin American, FSU and Middle Eastern supplies are adjusted lower, but are
more than offset by higher forecasts for Norway, China and biofuels. In sum, 2010 non‐OPEC supply is
now forecast to grow by 1.1 mb/d from 2009 and by a further 0.6 mb/d in 2011. The strongest annual
growth in 2011 stems from Latin America (+295 kb/d), followed by biofuels (+190 kb/d), the FSU
(+175 kb/d) and China (+125 kb/d), with smaller increments from refinery processing gains (+45 kb/d),
Australia & New Zealand (+45 kb/d) and Africa (+40 kb/d). These are only partly offset by decline in
North America (‐180 kb/d), OECD Europe (‐75 kb/d) and Other Asia (‐30 kb/d).

Non-OPEC Supply
1Q09 2Q09 3Q09 4Q09 2009 1Q10 2Q10 3Q10 4Q10 2010 1Q11 2Q11 3Q11 4Q11 2011
North America 13.5 13.5 13.7 13.8 13.6 13.9 14.0 14.1 14.2 14.1 14.0 13.7 13.7 14.0 13.9
Europe 4.9 4.5 4.2 4.5 4.5 4.5 4.2 3.7 4.1 4.1 4.3 4.0 3.9 4.1 4.1
Pacific 0.7 0.6 0.7 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.7 0.7 0.7
Total OECD 19.0 18.6 18.6 18.9 18.8 19.1 18.8 18.4 19.0 18.8 18.9 18.4 18.3 18.8 18.6
Former USSR 13.0 13.3 13.4 13.5 13.3 13.5 13.5 13.5 13.8 13.6 13.8 13.8 13.6 13.8 13.8
Europe 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
China 3.8 3.9 3.9 3.9 3.9 4.0 4.1 4.1 4.2 4.1 4.2 4.2 4.2 4.2 4.2
Other Asia 3.6 3.6 3.6 3.6 3.6 3.7 3.6 3.7 3.6 3.7 3.7 3.6 3.6 3.6 3.6
Latin America 3.8 3.9 3.9 4.0 3.9 4.0 4.1 4.1 4.1 4.1 4.2 4.3 4.4 4.5 4.4
Middle East 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7
Africa 2.6 2.6 2.6 2.6 2.6 2.6 2.6 2.6 2.6 2.6 2.6 2.6 2.7 2.7 2.6
Total Non-OECD 28.7 29.0 29.2 29.4 29.1 29.6 29.7 29.9 30.1 29.8 30.4 30.4 30.4 30.6 30.4
Processing Gains 2.2 2.2 2.3 2.3 2.3 2.3 2.3 2.3 2.3 2.3 2.3 2.3 2.4 2.4 2.3
Global Biofuels 1.1 1.6 1.8 1.7 1.6 1.4 1.9 2.1 1.8 1.8 1.6 2.0 2.4 2.1 2.0
Total Non-OPEC 51.1 51.4 51.9 52.3 51.7 52.4 52.8 52.8 53.2 52.8 53.2 53.1 53.5 53.9 53.4
Annual Chg (mb/d) 0.3 0.6 1.4 1.4 0.9 1.3 1.4 0.9 0.8 1.1 0.8 0.2 0.7 0.7 0.6
Changes from last OMR (mb/d) 1.0 1.2 1.2 1.4 0.0 0.1 0.1 0.2 0.2 0.2 0.1 0.0 0.0 0.1 0.1


Non-OPEC Medium-Term Outlook Now Seen Brighter
In June’s MTOGM, recovering oil prices and global oil demand, as well as evidence of a relative cost
reduction, renewed upstream investment and a slowing of observed field decline rates, were seen as
boosting non‐OPEC supply prospects. While these factors are unchanged, with the exception of upstream
costs, which appear to have bottomed out, a number of factors have led us to more than double our
2009‐2015 non‐OPEC supply growth outlook to 2.3 mb/d, with output now seen rising from 51.7 mb/d in
2009 to 54.0 mb/d in 2015.
Firstly, stronger‐than‐expected production in a number of countries, as well as a baseline revision to China,
have resulted in 0.6 mb/d higher 2010 output. Much of this accrues from the US, not least because of only
minor storm‐related shut‐ins in the US Gulf of Mexico this year. US oil production has surprised to the
upside on a number of fronts, notwithstanding ongoing delays from the Gulf of Mexico. Onshore supply,
both from conventional crude, but also from gas liquids, shale oil plays and refinery additives have been
sharply higher than foreseen. On the assumption that this can be sustained, we carry much of this growth
forward, which alone provides for nearly half the upward revision.

mb/d Total Non-OPEC Supply mb/d Non-OPEC Supply: Change 2009-15

54.5 1.0
0.8
54.0 0.6
0.4
53.5 0.2
0.0
53.0 -0.2
-0.4
52.5 -0.6
52.0
51.5 Dec 2010 MTOGM
Jun 2010 MTOGM
51.0
2009 2010 2011 2012 2013 2014 2015

Other countries for which we have hiked our forecast include China and Russia. China’s runaway oil demand
growth sometimes obscures that it is the world’s fifth‐largest producer of oil (after Russia, Saudi Arabia, the
US and Iran) and has ongoing incentives to curb its rising crude imports by boosting domestic output. This
year has seen consistently higher‐than‐expected oil production as newer, offshore fields increase output but
also, crucially, as older, mature onshore assets curb decline through application of enhanced recovery
techniques. These two factors, plus evidence of growth at other key onshore areas, have led us to hike
our forecast.
Russia too has seen a series of upward revisions to forecast, as monthly output has outperformed
expectations. Projected growth this year of 250 kb/d will likely slow next year after which output is
anticipated to plateau and then fall again to around 2010 levels, as decline at mature fields more than
offsets new projects. Our forecast is based upon the assumption that key tax incentives are extended and/or
adapted in such a manner that upstream investment continues. While this has tended to be the case
historically, it nonetheless represents a key downside risk to our forecast.
The largest downward revisions were for Canadian oil sands, where a degree of project slippage is evident.
By 2015, this curbs nearly 400 kb/d from previously‐forecast output, though overall oil sands production is
still expected to grow strongly. Global biofuels, Azerbaijan and Brazil are all adjusted downward
more minimally.
The key sources of non‐OPEC supply growth remain relatively unchanged. Brazilian crude, global biofuels,
Canadian oil sands, Colombia and the FSU provide incremental output, while decline is strongest in the UK,
Norway and Mexico. Broken down into the different liquids streams, biofuels make for the majority of
incremental output, at 37%, with NGLs and unconventional liquids providing around 20% each, and refinery
processing gains 12%. Non‐OPEC crude supply is now seen increasing by 255 kb/d or 11%, compared to the
previously‐expected 1.0 mb/d decline.


OECD
North America
US – November Alaska actual, others estimated: Total US oil supply was revised up by 250 kb/d in
4Q10, to just over 7.9 mb/d, as this year’s hurricane season passed without any further shut‐ins. This
year was actually the third most active on record, with 19 named storms, of which five became major
hurricanes. Crucially however, despite an average 25% of storms making landfall, this year only Hurricane
Alex and Tropical Storm Bonny forced the precautionary shut‐in of Gulf of Mexico output in June and July
(of ‐27 kb/d and ‐105 kb/d respectively), only having a negligible impact on yearly output. In combination
with slightly higher production elsewhere, 2010 oil production is revised up by 55 kb/d to 7.8 mb/d.

In contrast, 2011 production levels are adjusted down by 65 kb/d to 7.7 mb/d, as US GoM drilling delays
are now expected to be more protracted (see Longer Drilling Delays Seen in Gulf of Mexico). Alaskan
output is also seen lower on the delayed start‐up of Eni’s Nikaitchuq field into 3Q11.

mb/d US Total Oil Supply mb/d US Total Oil Supply - Yearly Change
8.5 0.80
8.0 0.60
7.5 0.40
7.0 0.20
6.5 0.00
6.0 -0.20
5.5 -0.40
Jan Mar May Jul Sep Nov Jan 1Q10 3Q10 1Q11 3Q11
2008 2009 Alaska California Texas
2010 2010 forecast Other Lower-48 Gulf of Mexico NGLs
2011 forecast Other Total

As a further result of the Macondo disaster, the Obama administration has now rescinded its plan to
open up previously‐closed offshore areas to exploration and development (see Proposals to Open Outer
Continental Shelf Could Double US Crude Reserves in OMR of 13 April 2010). Only around a month before
the Deepwater Horizon drilling rig exploded and sank, causing the largest‐ever oil spill in US waters, the
government had proposed making areas offshore Alaska, the Eastern Gulf of Mexico and large parts of
the Atlantic Coast accessible to drillers. Heightened caution over drilling and a large‐scale environmental
study currently being undertaken may even delay a Western Gulf lease sale planned for next year. The
about‐face regarding the new offshore areas will however have no impact on our medium‐term view of
US oil production potential, because of the multi‐year time lag between successful exploration and
ultimately bringing onstream oil discoveries, even after companies start drilling.

In another development that could have longer‐term effects on US oil (and gas) production, the state of
New York voted for a moratorium of different sorts, namely on hydraulic fracturing (‘fracking’) on its
territory. The proposal still requires the state governor to sign it into law, but would halt all activity until
mid‐May 2011. Fracking, which involves pumping water and chemicals into the ground at high pressure,
thereby fracturing rock in order to maximise well output, has underpinned the recent surge in US
domestic gas production, as well as some unconventional oil plays. There are concerns however that it
leads to contamination of drinking water.



Longer Drilling Delays Seen in Gulf of Mexico
Despite the lifting of the official deepwater drilling moratorium on 12 October, no permits for wholly new
wells have so far been granted by the new Bureau of Ocean Energy Management, Regulation and
Enforcement (BOEMRE). With even permits for shallow‐water drilling (not covered by the moratorium)
having been less than forthcoming in recent months, coupled with new, tighter, regulations in place, and the
new regulator apparently struggling to cope with new demands made on its time, delays to drilling are now
seen to be prolonged.
US Oil Supply 2015 (kb/d) kb/d US Total Oil Supply Yearly Change
Other Alaska 0.60
504 Califor-
278 nia
0.40
479
0.20
Texas
1117 0.00
NGLs
1879
-0.20
-0.40
Gulf of 2010 2011 2012 2013 2014 2015
Other US - Alaska US - Texas
Mexico Lower-48
1585 US - Other Lower 48 US - Gulf of Mexico
1617
US - NGL Other
Previously, our assumption that development of new deepwater fields would be delayed by 6‐12 months had led
us to forecast that US GoM crude production would be ‐60 kb/d and ‐100 kb/d lower than previously forecast in
2010 and 2011 respectively. We now see these delays as being more protracted – on average in a range of 12‐
18 months. Moreover, we now carry through these delays into our updated MTOGM forecast to 2015.
As a last point, we assume that drilling wells of all kinds will take longer in the GoM area, given more
invasive safety requirements and higher costs. As such, we also assume that some slippage will occur in
drilling to sustain output at existing fields. To model this, we have hiked decline rates at all post‐peak GoM
oil fields by 10%. In sum, drilling delays are expected to curb 300 kb/d off previously‐anticipated 2015
production, broken down as follows:
Effect of Drilling Delays on US GoM Previously‐Forecast Output
Extended delays at new GoM fields ‐170
GoM delays already factored in ‐50
Slippage at producing fields ‐80
TOTAL ‐300
It is worth emphasising however that other, offsetting, factors affect overall changes to our medium‐term
forecast for the GoM in particular, and US in general. The end of the hurricane season in the Gulf brings the
elimination of November/December adjustments and a resulting change to forecast. Adjustments to project
timings in the Gulf resulting from other factors, including baseline production levels, have affected the GoM
outlook since June. Elsewhere in the US, stronger‐than‐expected recent growth in onshore crude production,
in part related to shale oil plays, as well as NGLs and even ‘other hydrocarbons’, all contribute to more than
offset any downward revisions to the US forecast. Indeed, contrary to widespread pessimism about a decline
in output, we now see US total oil supply remaining flat at around 7.45 mb/d from 2009 to 2015.

Canada – Newfoundland October actual, others September actual: November oil production in Canada
surged by 300 kb/d to 3.5 mb/d, as mined, upgraded synthetic and Newfoundland offshore crude
production bounced back from maintenance. However, estimated Canadian supply is nudged down by
reported delays in ramping up bitumen output at Nexen’s Long Lake facility, which for 4Q10 is partly
offset by higher crude elsewhere, but for 2011 is carried through, resulting in a downward adjustment of
50 kb/d. Total Canadian supply is now estimated to average 3.3 mb/d in both 2010 and 2011.

mb/d Canada Total Oil Supply mb/d MexicoTotal Oil Supply

3.5 3.4
3.4 3.3
3.2
3.3
3.1
3.2
3.0
3.1
2.9
3.0 2.8
2.9 2.7
Jan Mar May Jul Sep Nov Jan Jan Mar May Jul Sep Nov Jan
2008 2009 2008 2009
2010 2010 forecast 2010 2010 forecast
2011 forecast 2011 forecast

Mexico – October actual: Mexican oil production averaged just over 2.9 mb/d in October, unchanged
from September. Details emerged on the proposed so‐called ‘integrated E&P contracts’, which will give
financial incentives to private oil companies to explore and develop resources, though will not allow
production sharing with state oil company Pemex, nor the booking of any reserves. Nonetheless, the
contracts, which would initially cover only a select group of mature fields, could enable access by foreign
companies for the first time in over 70 years. If successful, later contracts could possibly allow access to
territory in northern Mexico, the large but challenging onshore Chicontepec field, and deepwater Gulf of
Mexico acreage. However, it remains to be seen how attractive the terms are.

North Sea
Norway – September actual, October provisional: 3Q10 and 4Q10 Norwegian oil supply estimates are
both adjusted down by around 15 kb/d, with October‐December monthly production estimated to be
relatively steady at 2.2 mb/d, up from heavy maintenance in August and September. In contrast, 2011
production is revised up by nearly 50 kb/d, on higher estimated output from the newly‐online Gjøa and
Vega fields, which are expected to add 50 kb/d and 25 kb/d respectively of crude and condensate.

mb/d Norway Total Oil Supply mb/d Australia Total Oil Supply
2.7 0.62
0.60
2.5
0.58
2.3 0.56
0.54
2.1 0.52
0.50
1.9
0.48
1.7 0.46
2008 2009 2008 2009

Pacific
Australia – September actual: September oil production in Australia averaged a reduced 500 kb/d, as
flooding in the Cooper Basin has hit output this year. Production in 2010 is expected to average
525 kb/d, down from 555 kb/d in 2009. The 2011 forecast is adjusted 20 kb/d lower, but nonetheless
indicates a pick‐up to 565 kb/d as output at the Pyrenees offshore field hits capacity and the delayed
Montara field comes onstream. Results of the investigation into the Montara field accident, which
suffered a fire in August 2009 and an oil leak that lasted ten weeks until the well could be plugged, have
shown that the operator ‘failed to observe sensible field practices’. The report also made a long list of
recommendations, most of which the government supports, and will likely result in the setting‐up of a
national offshore regulator. Compared to the Macondo oil spill in the US Gulf of Mexico, the Montara

incident caused no loss of lives and a far smaller volume of oil spilled. The field is now expected to start
production in mid‐2011, as compared to its planned original target of late‐2008, and will have a lower
peak output capacity of 35 kb/d.

Former Soviet Union (FSU)
Russia – October actual, November provisional: Total Russian oil production was steady at 10.6 mb/d in
October and November, with revisions to preliminary October data minimal. Overall, production in 2010
is estimated to average 10.5 mb/d. The 2011 forecast is nudged up by 30 kb/d and is now expected to
average 10.6 mb/d. The Russian government awarded the Trebs & Titov field cluster to Bashneft, after all
other bidders failed to qualify in an auction. The fields remain some of the largest undeveloped known
reserves in Russia. It is thought they can potentially be brought online relatively quickly, given substantial
work already undertaken and proximity to Lukoil’s existing export terminal on Russia’s northern coast at
Varandey. However, it is unclear whether a stipulation that some 40% of the field’s crude must be
processed by Bashneft will allow exports via Varandey. While the company does possess significant
excess refining capacity relative to crude production, its plants lie far south of Trebs & Titov in
Bashkortostan in Russia’s Urals‐Volga region.

mb/d Russia Total Oil Supply mb/d Azerbaijan Total Oil Supply
10.7 1.2
10.6 1.1
10.5
10.4 1.0
10.3 0.9
10.2 0.8
10.1
10.0 0.7
9.9 0.6
2008 2009 2008 2009

Azerbaijan – September actual: Preliminary data for Azerbaijan in September indicate that oil
production is some 175 kb/d higher than expected at 1.1 mb/d, in the apparent absence of anticipated
seasonal maintenance. This nudges 2010 estimated average supply up marginally, to 1.07 mb/d. The
2011 forecast in contrast is adjusted down by 30 kb/d and is now only seen growing to 1.09 mb/d, with
only minimal growth expected for the Azeri‐Chirag‐Guneshli (ACG) complex.

FSU net oil exports in October climbed by a significant 450 kb/d (4.9%) from their September level to
reach 9.5 mb/d. Increased crude shipments accounted for 360 kb/d of the rise, widely reflecting a 3%
decrease in the Russian crude export tariff versus September. Growing seaborne crude volumes
(+440 kb/d) more than offset lower flows transported via the Druzhba pipeline (‐70 kb/d). Shipments
from the Baltic increased by 190 kb/d, led by the Russian flagship terminal of Primorsk where, following
the conclusion of maintenance, 170 kb/d more crude oil was shipped compared to a month earlier. Far
East volumes increased by 100 kb/d to 790 kb/d and are now 310 kb/d above a year ago, reflecting ESPO
cargoes shipped from Kozmino. Initial port loadings suggest FSU crude seaborne shipments will slip
slightly in the next two months but remain above 9 mb/d.

FSU total oil product exports rose by a marginal 80 kb/d to 2.9 mb/d, reflecting exporters increasing
shipments to maximise profits in line with a 3% reduction in duties. Gasoil shipments increased by
160 kb/d, more than offsetting falls in the ‘other products’ category (‐80 kb/d) and fuel oil (‐10 kb/d).
Following on from last month’s reports of Russia narrowing the differential between product and crude
export duties (see Russia: Redrawing the Fiscal Map in report dated 12 November 2010), Economy
Minister Elvira Nabiullina recently indicated that by 2013 export duties levied on heavy and light
products would be unified at 60% of the crude duty. This level was not as high as some observers were

expecting and therefore will likely not increase crude exports at the expense of products to the extent
expected. However, since unification would significantly raise the duty on heavy products, it could shift
the balance of product exports towards the lighter end of the barrel with the intention of motivating
Russian refiners to invest in more complex capacity in order to take advantage of the improved
economics of exporting these products.
FSU Net Exports of Crude & Petroleum Products
Latest month vs.
2008 2009 4Q2009 1Q2010 2Q2010 3Q2010 Aug 10 Sep 10 Oct 10
Sep 10 Oct 09
Crude
Black Sea 2.06 2.21 2.15 1.79 1.99 2.05 2.21 1.80 1.95 0.16 -0.18
Baltic 1.46 1.62 1.64 1.60 1.61 1.57 1.64 1.48 1.67 0.19 -0.02
Arctic/FarEast 0.29 0.46 0.48 0.71 0.76 0.67 0.59 0.69 0.79 0.10 0.31
BTC 0.67 0.78 0.76 0.69 0.79 0.81 0.81 0.82 0.82 0.00 0.00
Crude Seaborne 4.48 5.07 5.04 4.78 5.16 5.10 5.25 4.79 5.22 0.44 0.10
Druzhba Pipeline 1.08 1.12 1.14 1.13 1.10 1.16 1.10 1.20 1.12 -0.07 -0.03
Other Routes 0.42 0.37 0.30 0.44 0.37 0.36 0.35 0.31 0.31 0.00 -0.02
Total Crude Exports 5.98 6.56 6.48 6.36 6.63 6.62 6.70 6.29 6.66 0.36 0.06
Of Which: Transneft 3.98 4.14 4.13 3.94 3.88 3.95 4.00 3.72 3.92 0.20 -0.22
Products
Fuel oil 1.14 1.15 1.19 1.13 1.28 1.28 1.34 1.21 1.23 0.01 0.18
Gasoil 1.03 1.15 1.12 1.20 1.14 1.08 1.11 0.97 1.13 0.16 0.04
Other Products 0.60 0.69 0.59 0.73 0.63 0.63 0.59 0.61 0.53 -0.08 0.04
Total Product 2.77 2.99 2.90 3.06 3.06 3.00 3.03 2.80 2.88 0.08 0.26
Total Exports 8.74 9.55 9.38 9.42 9.69 9.62 9.73 9.09 9.54 0.45 0.32
Imports 0.04 0.04 0.05 0.05 0.04 0.05 0.05 0.05 0.05 0.00 0.02
Net Exports 8.70 9.51 9.33 9.37 9.65 9.56 9.68 9.04 9.48 0.45 0.31
Sources: Petro-Logistics, IEA estimates
Note: Transneft data has been revised to exclude Russian CPC volumes.

Other Non-OPEC
The large Jubilee oil field offshore Ghana is now officially due to start production on 17 December. With
historically only minimal oil production of around 5 kb/d, Ghana is set to become one of Africa’s larger
sub‐Saharan producers when the first phase of Jubilee ramps up to its 120 kb/d capacity by the summer
of 2011. Various other additions bring total estimated Ghanaian oil production up to 175 mb/d by mid‐
decade, after which new Jubilee phases could take it even higher. Some think geological similarities
between discoveries offshore Sierra Leone to the west and Liberia and Ivory Coast in‐between point at
the existence of a large new oil‐bearing basin, yet to be mapped.

mb/d Ghana Total Oil Supply mb/d Sudan Total Oil Supply
0.20 0.6
0.18
0.16 0.5
0.14 0.4
0.12
0.10 0.3
0.08
0.06 0.2
0.04 0.1
0.02
0.00 0.0
2009 2010 2011 2012 2013 2014 2015 2009 2010 2011 2012 2013 2014 2015

Oil production in Sudan is revised up by 20 kb/d in 2009 to 480 kb/d on evidence we had been
undercounting some production. This and some other adjustments are carried through the forecast, thus
pushing up 2010 and 2011 by around 50 kb/d each, with production expected to remain flat at around
480 kb/d (and decline thereafter). However, a referendum on independence for the southern half of the
country, location of much of Sudan’s oil production, set for January 2011, could yet bring turmoil, as
these fields rely on pipelines through the north for exports.

Lower Baseline, But Still Strong Biofuels Growth in the Medium-Term

The global biofuels production outlook is modestly reduced since the June 2010 MTOGM. For 2009‐2015,
supply is revised down on average by 40 kb/d annually. Still, global growth, at 0.8 mb/d from 2009‐2015,
remains robust. We now see 2010 global biofuels production at 1.8 mb/d, up 260 kb/d from 2009, but
10 kb/d lower than in the MTOGM. Over the medium‐term we see global output increasing to 2.4 mb/d,
with annual growth from 2009‐2015 averaging 140 kb/d, similar to June’s forecast.
Much of the headline revision stems from lower mb/d Global Biofuels Supply - Annual
(‐25 kb/d) historical Brazilian ethanol for the series Growth
0.30
duration, as reported in the September OMR. Ethanol
production there in 2010 is expected at 475 kb/d, revised 0.25
down from 505 kb/d in June, with annual output rising to 0.20
695 kb/d in 2015 on the back of capacity expansions and 0.15
strong gasoline demand growth. Meanwhile, with a 0.10
stronger 2010 baseline, Brazilian biodiesel production has
0.05
been revised 5 kb/d higher over the medium‐term, with
0.00
2015 production at 60 kb/d from 40 kb/d in 2010.
2009 2010 2011 2012 2013 2014 2015
US ethanol output, at 850 kb/d for 2010, has been Current Forecast Jun-10 Forecast
stronger than expected. Yet, the year‐end expiry of a
45 cent/gallon blenders’ tax credit casts doubt over future economics. For much of 2010 ethanol without the
credit was competitive versus gasoline, but corn price rises and eroding margins have threatened that
position. The EPA approved E15 use for 2007 or later vehicles, and a decision on earlier models is expected
in early 2011. However, increased consumption is likely to be minimal in the short‐term, due to other supply
chain barriers. Meanwhile, US biodiesel, with the expiry of its blenders’ credit at end‐2009, has seen 2010
output down by one‐third versus 2009.
World Biofuels Production
2008 2009 2010 2011 2012 2013 2014 2015

OECD North America 672 759 902 962 997 1,029 1,051 1,079
United States 655 738 875 928 961 992 1,010 1,037
OECD Europe 184 207 240 264 284 293 297 299
OECD Pacific 7 8 9 12 13 14 16 16
Total OECD 863 974 1,152 1,239 1,294 1,337 1,364 1,394
FSU 3 3 3 9 11 11 11 11
Non-OECD Europe 1 3 3 3 3 3 3 3
China 42 43 47 50 54 56 56 60
Other Asia 26 38 51 73 93 94 96 97
Latin America 486 499 563 632 717 763 796 823
Brazil 457 456 516 576 654 694 725 753
Middle East 0 0 0 0 0 0 0 0
Africa 1 2 3 6 8 9 11 14
Total Non-OECD 559 587 671 773 886 938 974 1,009
Total World 1,421 1,561 1,823 2,012 2,180 2,275 2,338 2,403
To be sure, the political debate over the credits remains undecided and the Renewable Fuels Standard (RFS)
still provides key blending support. We have revised US ethanol production down on average by 15 kb/d
from 2011‐2015, though we expect output in line with the RFS, with volumes at 980 kb/d in 2015. Still, some
market analysts have predicted production drops of 5‐15% in 2011 should the subsidies vanish. While the
cellulosic biofuel tax credit runs through 2012, lower overall investment may have a knock‐on effect here as
well. Near‐term prospects for cellulosic biofuel in 2011 have fallen, with next year’s RFS requirement at only
6.6 million gallons (< 1 kb/d), virtually unchanged from 2010 output.
In Europe, biofuels production is revised up by 5 kb/d from 2010‐2015 with a higher biodiesel baseline.
Ethanol output prospects have also improved, with Germany raising the blending limit for ethanol from 5%
to 10%. Still, most European governments appear unready to implement, before year‐end, sustainability
criteria requiring biofuels to provide greenhouse gas savings of at least 35% versus fossil fuels for national
targets. As such, feedstock and biofuel trade prospects remain uncertain, both within and out of the EU. All
the while, Europe’s 2010 biofuels output, at 240 kb/d, looks to meet just 3.1%, by energy content, of its own
transport demand, versus an overall 5.75% renewable fuels target.

I NTERNATIONAL E NERGY A GENCY ‐ O IL M ARKET R EPORT OECD S TOCKS
OECD STOCKS

Summary
• OECD industry stocks built by a modest 0.7 mb to 2 745 mb in October, contrasting with the average
6.7 mb monthly draw over the past five years. The generally flat profile saw crude builds balance out
product draws in Europe and North America.

• October OECD forward demand cover rose to 60.1 days, from 59.7 days in September. The increase
was driven by higher European cover, rising by 2.6 days on weaker expected forward demand for
gasoline and middle distillates.

• Preliminary November data indicate OECD industry oil stocks fell by 8.4 mb, broadly in line with the
five‐year average draw of 10.9 mb. Crude oil and product inventories declined by 5.7 mb and 2.8 mb,
respectively, as US draws more than offset builds in Europe and Japan.

• Short‐term oil floating storage rose to 64 mb in November, from 59 mb at end‐October. Crude
floating storage expanded on builds in Asia‐Pacific, Northwest Europe and Latin America. Products
held in floating storage remained unchanged at 27 mb in November.

mb OECD Total Oil Industry Stocks mb OECD Middle Distillate Stocks mb
2,800 650 100
80
600
2,700 60
40
550
2,600 20
500 0
Oct 08 Apr 09 Oct 09 Apr 10 Oct 10
2,500
Difference to 5-Year Average (rhs)
2005 2006 2007 2008 2009 2010 OECD Middle Distillate Stocks

OECD Inventory Position at End-October and Revisions to Preliminary Data
Commercial oil stocks in the OECD regions rose slightly by 0.7 mb to 2 745 mb in October and stood
56 mb above the five‐year average level. Labour action in France and refinery maintenance in the US
resulted in a modest increase overall, stemming from offsetting crude builds and product draws. Over
the past five years, oil inventories on average have drawn by 6.7 mb in October, as product declines
outweighed rising crude oil stocks.

Preliminary Industry Stock Change in October 2010 and Third Quarter 2010
October (preliminary) Third Quarter 2010
(million barrels) (million barrels per day) (million barrels per day)
N. Am Europe Pacific Total N. Am Europe Pacific Total N. Am Europe Pacific Total
Crude Oil 6.5 15.3 -1.8 20.0 0.21 0.49 -0.06 0.64 -0.07 -0.26 -0.11 -0.44
Gasoline -8.3 -1.0 1.3 -8.0 -0.27 -0.03 0.04 -0.26 0.05 0.00 -0.03 0.03
Middle Distillates -10.3 0.3 1.7 -8.3 -0.33 0.01 0.06 -0.27 0.14 -0.06 0.09 0.17
Residual Fuel Oil 0.7 -1.3 -1.8 -2.4 0.02 -0.04 -0.06 -0.08 -0.02 -0.04 0.01 -0.05
Other Products -4.7 -1.0 4.3 -1.4 -0.15 -0.03 0.14 -0.04 0.04 0.02 0.03 0.08
Total Products -22.6 -3.0 5.6 -20.1 -0.73 -0.10 0.18 -0.65 0.21 -0.08 0.11 0.23
Other Oils1 1.2 -1.3 0.8 0.7 0.04 -0.04 0.03 0.02 0.07 -0.04 -0.02 0.01
Total Oil -14.9 10.9 4.6 0.7 -0.48 0.35 0.15 0.02 0.21 -0.38 -0.02 -0.19
1 Other oils includes NGLs, feedstocks and other hydrocarbons.


OECD S TOCKS I NTERNATIONAL E NERGY A GENCY ‐ O IL M ARKET R EPORT
September inventory levels were revised down by 6.4 mb, largely on more complete data for European
crude oil and US ‘other products’ holdings. Meanwhile, monthly US data indicate that gasoline stocks
were 3.8 mb higher in September, implying a weaker monthly draw of 1.5 mb than reported last month.
Downward revisions also affected September forward demand cover, which has been reassessed lower
at 59.7 days. October OECD forward cover rose to 60.1 days, driven by higher European cover, up by
2.6 days on weaker forward demand for gasoline and middle distillates.

Revisions versus 12 November 2010 Oil Market Report
(million barrels)
North America Europe Pacific OECD
Aug 10 Sep 10 Aug 10 Sep 10 Aug 10 Sep 10 Aug 10 Sep 10
Crude Oil -2.6 -1.7 1.5 -5.4 -0.1 2.0 -1.1 -5.1
Gasoline 0.1 4.0 -0.2 -0.3 0.0 -0.2 0.0 3.4
Middle Distillates -0.3 0.1 -0.5 -0.7 0.0 1.1 -0.8 0.5
Residual Fuel Oil 0.0 1.7 -0.1 -1.0 0.0 -0.3 -0.1 0.5
Other Products 0.3 -5.3 0.3 1.1 0.0 -0.5 0.6 -4.7
Total Products 0.1 0.4 -0.5 -0.9 0.0 0.1 -0.3 -0.4
1
Other Oils 0.7 2.1 0.0 -3.0 0.0 0.0 0.7 -0.9
Total Oil -1.7 0.9 1.0 -9.3 -0.1 2.1 -0.8 -6.4
1 Other oils includes NGLs, feedstocks and other hydrocarbons.

Total OECD middle distillate stocks stood at 582 mb in October, with a 35 mb surplus to the five‐year
average. Ahead of winter, North America and Europe seem to be well supplied, with distillate stocks
20.8 mb and 23.8 mb above five‐year averages, respectively, and only the Pacific maintaining a 9.4 mb
deficit in October. In addition, middle distillates held in floating storage near Northwest Europe and the
Mediterranean also provide some cushion.

Overall, offshore storage of products at sea remained unchanged at 27 mb in November, as a build‐up
near West Africa compensated for a further offloading in the Mediterranean. Crude floating storage
expanded by 5.5 mb in Northwest Europe, Asia‐Pacific and Latin America, reaching 38 mb globally, and
brought total short‐term oil floating storage to 64 mb in November, up from 59 mb in October. Onshore
OECD industry oil stocks fell by 8.4 mb in November, as crude inventories dropped by 5.7 mb and
product stocks contracted by 2.8 mb.

Analysis of Recent OECD Industry Stock Changes
OECD North America
Industry oil stocks in North America fell by 14.9 mb to 1 381 mb in October, vastly exceeding the 2.1 mb
five‐year average stock‐draw. Middle distillate stocks fell by 10.3 mb and gasoline dropped by 8.3 mb.
This second consecutive monthly decline, led by gasoline and distillates, helped to draw down some of
the regional excess build‐up over recent months. Total regional product holdings fell by 22.6 mb, while
crude inventories rose by 6.5 mb.
mb OECD North America mb OECD North America Middle
mb
1450 Industry Total Oil Stocks 160 Distillates Stocks
260
140
1400 120 240
100 220
1350 80
200
60
1300 40 180
20 160
1250 0 Jan Mar May Jul Sep Nov Jan
Oct 08 Apr 09 Oct 09 Apr 10 Oct 10
Range 2005-2009 Avg 2005-2009
Difference to 5-Year Average (rhs) 2009 2010
Total Oil


According to preliminary weekly data from the US Energy Information Administration (EIA), US industry
stocks drew by 20.9 mb in November. Crude oil inventories fell by 9.7 mb as a result of lower imports
and products fell by 11.2 mb. Middle distillates shrunk by 4.2 mb with ultra‐low‐sulphur diesel
accounting for more than 80% of the decrease, while gasoline inventories gained 0.6 mb. US producers
almost doubled their gasoline exports to Latin America this year, and in doing so helped to reduce the
stock overhang created by weak 2009 demand. Gasoline stocks re‐converged on seasonal average levels
following a disconnect over the recent months.

mb US Weekly Cushing Crude Stocks mb US Weekly Total Gasoline Stocks
40 245
35 235
30 225
215
25
205
20
195
15 185
Source: EIA Source: EIA
10 175
Jan Apr Jul Oct Jan Apr Jul Oct
Range 2005-09 5-yr Average Range 2005-09 5-yr Average
2009 2010 2009 2010

The US EIA published for the first time its semi‐annual report of US liquid fuel storage capacity. It clarified
net available shell storage capacity in Cushing, Oklahoma, estimated at 54.975 mb as of
30 September 2010, of which 45.882 mb (83.5%) are considered working capacity. The EIA assessment of
Cushing capacity is higher than previously estimated by others. Uncertainty about the actual levels of
operable storage capacity at Cushing distorted the market outlook in July, when traders feared rising
stocks would soon reach maximum operational levels. In the light of new data from the EIA, the stocks in
Cushing reached 37.8 mb, or 82.4%, at their highest levels in July, while November stocks rose by 1.7 mb
to 34.8 mb, or 75.8% of working storage capacity.

OECD Europe
Industry oil inventories in Europe rose by 10.9 mb to 956 mb in October. Monthly stock‐build, deriving in
part from French port and refinery strikes (see Accounting for French October Strikes below), contrasted
with a more normal 7.0 mb seasonal decline led by product draws. This year, products declined by
3.0 mb, more in line with the 6.1 mb five‐year average draw, partly balancing a sizeable 15.3 mb gain in
crude oil inventories. Inventories of ‘other oils’ dropped by 1.3 mb in October, largely driven by France,
but these stocks have fallen by 10.0 mb since March 2010. Gasoline holdings fell by 1.0 mb, fuel oil
stocks decreased by 1.3 mb, but middle distillate stocks built by a modest 0.3 mb, originating in France.
In Germany, end‐user heating oil stocks increased from 62% to 63% of capacity in October.
OECD Europe Other Oils Stocks German End-User Heating Oil Stocks
mb %
% of Storage Capacity
80 70
65
75
60
70 55
50
65
45
60 40
Range 2005-2009 Avg 2005-2009 Range 2005-2009 Avg 2005-2009
2009 2010 2009 2010



Accounting for French October Strikes
Preliminary data indicate that commercial oil inventories in France were 3.0 mb lower at the end of October
from month earlier. During the month, the country experienced serious logistical disruptions caused by port
and storage depot blockades in protest against pension reforms and port restructuring. French authorities
responded to the disruption by permitting regional stock swaps, allowing the use of emergency stocks to
alleviate shortages in affected regions and to compensate with commercial operational stocks held
elsewhere in the country. In addition, on 15 October, the French authorities permitted companies to use
approximately 14 mb of the some 40 mb of stocks they normally hold to meet emergency stockholding
requirements. Later, as regional swap opportunities dried up, loans of government strategic stocks were also
authorized, including an 8 mb loan consisting mainly of middle distillates.
As a result of this flexible policy, government‐controlled France October Stock Change
inventories edged 2.8 mb lower at end‐October, with crude mb -10 -5 0 5 10
oil and gasoline stocks up by 5.7 mb and 0.5 mb, respectively,
while middle distillates contracted by 8.9 mb. Crude oil Crude Oil
industry stocks edged 0.7 mb lower and gasoline and ‘other Other Oils
products’ dropped by 1.1 mb each. Industry distillate stocks
rose by 1.6 mb, aided by the use of government‐controlled Gasoline
stocks following diesel shortages at filling stations and to Distillates
facilitate end‐user pre‐winter restocking.
Fuel Oil
To relieve the build‐up of vessels near French ports, some Other Products
ships, originally destined for France, were transferred to
Industry Governm ent-Controlled
neighbouring countries, including Spain, Portugal, the UK and
the Netherlands, and as a result, October crude holdings in European countries surged counter‐seasonally by
15.3 mb. When the strike ended on 29 October, a large backlog of tankers still awaited offloading near the
port of Fos‐sur‐Mer/Lavera in Southern France.

Preliminary data from Euroilstock indicate that oil industry inventories in the EU‐15 plus Norway rose by
7.2 mb in November, in line with the 7.6 mb stock‐build over the past five years. Crude oil holdings
edged 0.4 mb higher, while products built by 6.9 mb. Middle distillate stocks surged by 3.9 mb, while
gasoline and naphtha also increased. Meanwhile, refined oil products held in independent storage in
Northwest Europe remained virtually unchanged in November, as large draws in gasoline and fuel oil
were balanced by strong gasoil builds, despite colder temperatures towards the end of the month.

OECD Pacific
Commercial oil inventories in the OECD Pacific rose by 4.6 mb to 407 mb in October. By comparison,
October over the past five years has normally seen builds averaging 2.4 mb. The stockbuild narrowed the
deficit to the previous year’s levels but inventories still stood 30 mb below the five‐year average. A sharp
increase in ‘other products’ (+4.3 mb) drove the monthly stock‐build that followed a stronger weather‐
related September draw. But increases in gasoline and distillates also contributed, while fuel oil
inventories dropped by 1.8 mb. Crude oil holdings fell by 1.8 mb, led by a decline in Korea.
OECD Pacific Crude Oil Stocks OECD Pacific Other Products Stocks
mb mb
190 80
75
180
70
170 65
60
160
55
150 50
2009 2010 2009 2010


Japanese oil industry stocks rose by 5.2 mb in November, according to preliminary weekly data from the
Petroleum Association of Japan (PAJ). Crude oil stocks built by 3.7 mb. Meanwhile, product inventories
edged higher by 1.5 mb, driven by increases in gasoline and naphtha holdings, but a decline in middle
distillates provided some offset.
mb Japan Weekly Gasoline Stocks mb Japan Weekly Kerosene Stocks
17 35
16 30
15 25
14
20
13
12 15
11 10
Source: PAJ
Source: PAJ
10 5
Jan Apr Jul Oct Jan Apr Jul Oct
2009 2010 2009 2010

Recent Developments in China and Singapore Stocks
According to China Oil, Gas & Petrochemicals (China OGP), Chinese commercial oil inventories drew by
12.8 mb in October. Crude stocks fell by a further 3.4% (7.3 mb) on the month, driven by higher refinery
runs and a drop in imports from September record highs (oddly, crude stocks have risen or fallen exactly
by 3.4% over the past three months). Surging demand curtailed gasoil stocks by 5.6 mb in October and
levels have fallen by more than 45% since February 2010. This happened despite a drop in gasoil exports,
rising imports and maximized crude runs in an attempt to keep the market supplied. Meanwhile,
kerosene stocks contracted by 0.8 mb and gasoline rose by an offsetting 0.8 mb.

mb China Monthly Oil Stock Change Singapore Weekly Middle Distillate
10 mb
Stocks
18
5 16
14
0 12
10
(5) 8
6
Source: Int ernat ional Enterprise
So urce: China Oil, Gas and P etro chemicals 4
(10)
Jan Apr Jul Oct
Apr 10 Jun 10 Aug 10 Oct 10
Range 2005-2009 5-yr Average
Crude Gasoline Gasoil Kerosene 2009 2010

Refined product inventories in Singapore rose by 3.4 mb in November, driven by higher fuel oil and gasoil
inflows. Recent cargo arrivals raised fuel oil stocks by 2.0 mb, while higher gasoil exports, mainly from
Japan and Korea, added 1.3 mb to gasoil tanks. Chinese companies imported several cargoes from
Singapore and China reportedly became a net gasoil importer for the first time since November 2008.

Regional OECD End-of-Month Industry Stocks

(in days of forward demand and millions barrels of total oil)
Days1 Million Barrels
Days mb North America
North America
61 1,450
59 1,400
57
1,350
55
53 1,300
51 1,250
49
1,200
47
45 1,150
2009 2010 2009 2010
Days Europe mb Europe

72 1,020
70
1,000
68
66 980
64 960
62
940
60
58 920
56 900
2009 2010 2009 2010
Days Pacific mb Pacific

60 480
460
55
440
50
420
45
400
40 380
2009 2010 2009 2010
Days OECD Total Oil mb OECD Total Oil

64 2,850
62 2,800
60 2,750
58 2,700
56 2,650
54 2,600
52 2,550
50 2,500
2009 2010 2009 2010
1 Days of forward demand are based on average demand over the next three months

I NTERNATIONAL E NERGY A GENCY ‐ O IL M ARKET R EPORT P RICES
PRICES

Summary
• The early onset of frigid winter weather coming on the heels of exceptionally strong 3Q10 global
demand growth combined to push prices to trading peaks of around $90‐92/bbl by early December.
Much of the blame for rising prices since the summer had been placed on financial and commodity
markets, but it now looks clearer that fundamentals in fact continued to provide a firm underpinning.
At writing, benchmark crudes were trading around $88‐$91/bbl.

• Gasoil prices surged as temperatures plummeted in early December, but November spot product
price increases were largely eclipsed by surging crude prices in Europe. Meanwhile crack spreads and
refining margins in the US and Singapore only managed to post modest improvements on average for
the month. Surging Chinese demand for middle distillates for electricity and agricultural needs,
however, boosted gasoil in the region.

• Low temperatures also proved the impetus for futures contracts to shift slightly from the contango
price structure prevailing for the past two years into backwardation in early December. As prices
moved above $90/bbl, producing companies also stepped in to hedge long‐term production, helping
to push further out futures contracts below the front month.

• Regulators moved apace with writing new rules to implement reform packages for over‐the‐counter
(OTC) derivatives in the US and Europe, although market participants have raised a number of
concerns over the rule making process. Monitoring an inherently dynamic industry is a complex and
difficult task and regulators themselves have expressed uncertainty over what the new regulations
will bring to the market.

• Both crude and product freight rates experienced a resurgence in November, helped by weather
delays in the Bosporus Straits, the anticipation of ice‐class requirements in the Baltic, increasing
imports into China and Japan and arbitrage opportunities for shipping gasoline into the US East Coast.
$/bbl Crude Futures US$/bbl NYMEX WTI vs S&P 500 Index

Front Month Close 90 1300
95
80 1200
90
1100
70
85 1000
60
80 900
75 50
800
70 40 So urce: NYM EX 700
Source: ICE, NYMEX
65 30 600
Nov 09 Feb 10 May 10 Aug 10 Nov 10 Jan 09 Jun 09 Nov 09 Apr 10 Sep 10
NYMEX WTI ICE Brent NYMEX WTI S&P 500 (RHS)

Market Overview
The early onset of frigid winter weather in much of the northern hemisphere following exceptionally
strong third‐quarter global demand growth combined to push prices to trading peaks of around
$90‐92/bbl in early December. While financial and commodity markets were singled out as the main
drivers for rising prices since the summer, it now looks clearer that fundamentals in fact continued to
provide a firm underpinning. Benchmark crudes in November rose by around $2.35‐$2.60/bbl, with WTI
averaging $84.31/bbl and Brent $86.15/bbbl. By the week ending 3 December, futures prices had posted
further gains of around $2.50/bbl. At writing, benchmark crudes were trading around $88‐$91/bbl.

P RICES I NTERNATIONAL E NERGY A GENCY ‐ O IL M ARKET R EPORT
In November, oil prices posted their own U‐shaped recovery, as market worries over the Eurozone crisis,
expectations that China will tighten its monetary policy and release of various bearish economic data
from the US pressurised prices mid‐month. Prices later rebounded on reports of further monetary easing
in the US, a weaker dollar and the sudden emergence of blustering cold weather in Europe and the US.
Indeed, WTI settled on 17 November at a monthly low of
US$/bbl NYMEX WTI vs US Dollar Index Index
$80.44/bbl before scaling new two‐year heights on 100 70
3 December, to $89.19/bbl. Brent posted similar gains 90
over the same period, rising by more than $8/bbl, from a 80 75
November low of $83.28/bbl to a high of $91.42/bbl by 70
80
3 December. WTI continued to trade at a discount to 60
Brent in November and, for the first time in more than 50 85
two years, Brent futures moved into slight backwardation 40 So urce: ICE, NYM EX
on 6 December, underscoring the strength of prompt 30 90
fundamentals. Jan 09 Jun 09 Nov 09 Apr 10 Sep 10
NYMEX WTI
US Dollar Index (inversed RHS)
Near‐term, price strength could persist in the coming
weeks based on forecasts for continued cold temperatures. Oil demand growth has also been revised
higher for 4Q10 and 2011 but overall will ease from the exceptionally strong growth rates posted in
3Q10. Demand has been surprisingly strong in the US, China and other Asia.

Despite the unprecedented market move to the upside in recent weeks, some analysts are convinced
that neither oil supply and demand fundamentals nor economic activity justify sharply higher prices.
While global inventories have slimmed down, OECD stocks are still well above the five‐year average. In
the US, refiners may opt to draw down stocks as companies try to minimise their end‐year tax liability.
The current winter weather may help shave inventories by year‐end, but it would take a very protracted
cold spell to trigger a significant draw in stocks. Non‐OECD demand indicators also appear to be easing,
especially from China, where expectations of a more constrained monetary policy are expected to
temper oil demand growth. Near‐term, our latest Chinese demand forecast sees the strong surge in
gasoil use, which has ramped up smartly to offset government‐mandated shut‐in of coal‐fired power
plants and on the back of robust agricultural demand, continuing in 1Q11 but easing thereafter.

Prompt Month Oil Futures Prices
(mo nthly and weekly averages, $ /bbl)
Sep Oct Nov Nov-Oct % Week Com m encing:

Avg Chg Chg 01 Nov 08 Nov 15 Nov 22 Nov 29 Nov
NYMEX
Light Sw eet Crude Oil 75.55 81.97 84.31 2.34 2.8 84.98 86.86 82.20 82.65 86.76
RBOB 81.68 88.61 91.87 3.26 3.6 89.86 92.78 91.84 91.46 97.08
No.2 Heating Oil 88.73 94.95 98.06 3.11 3.2 97.92 101.10 96.61 96.18 100.99
No.2 Heating Oil ($/mmbtu) 15.23 16.30 16.83 0.53 3.2 16.81 17.36 16.59 16.51 17.34
Henry Hub Natural Gas ($/mmbtu) 3.90 3.60 4.03 0.43 10.8 3.87 4.01 3.97 4.27 4.27
ICE
Brent 78.42 83.54 86.16 2.62 3.0 86.50 88.18 84.82 84.95 88.85
Gasoil 90.15 96.35 98.56 2.22 2.2 98.21 101.23 97.59 96.91 100.74
Prom pt Month Differentials
NYMEX WTI - ICE Brent -2.87 -1.56 -1.84 -0.28 -1.53 -1.32 -2.62 -2.29 -2.09
NYMEX No.2 Heating Oil - WTI 13.18 12.97 13.74 0.77 12.94 14.25 14.41 13.53 14.23
NYMEX RBOB - WTI 6.13 6.63 7.56 0.92 4.88 5.92 9.64 8.80 10.33
NYMEX 3-2-1 Crack (RBOB) 8.48 8.75 9.62 0.87 7.57 8.70 11.23 10.38 11.63
NYMEX No.2 - Natural Gas ($/mmbtu) 11.34 12.70 12.80 0.10 12.94 13.34 12.61 12.24 13.07
ICE Gasoil - ICE Brent 11.74 12.81 12.40 -0.41 11.71 13.05 12.77 11.97 11.89
So urce: ICE, NYM EX


Futures Markets
The flatter forward price curve that has emerged in recent months finally flipped Brent futures into slight
backwardation in early December. Brent futures reached this point on 6 December —the first time the
contract has traded in backwardation in more than two years. Along the forward Brent curve, prices
declined by around $0.50‐$1.00/bbl, at the same time the prompt month jumped on cold weather‐
related buying. WTI futures contracts also moved into backwardation but from mid‐2011 onward. The
contango price structure had emerged in the wake of the global economic and financial market
meltdown in 2H08. Indeed, ever since, the forward price curve has tended to strengthen on expectations
of stronger oil demand just over the horizon.
$/bbl ICE Brent $/bbl NYMEX WTI
Forward Price Curve 110 Forward Price Curve
100
100
90
90
80 80
70 70
60 60
50 50
40 40
2010 2011 2011 2012 2012 2013 2010 2011 2012 2013 2014 2015 2016
06 Dec 08 06 Dec 09 06 Dec 08 06 Dec 09
06 Dec 10 06 Dec 10

However, whether backwardation becomes firmly re‐established will depend partly on the duration of
the weather‐related demand strength as well as moves by companies to sell into the forward curve to
hedge their future production. Reports of a wide swathe of producers taking advantage of oil prices
above $90/bbl to hedge future production has not yet been captured in reported CFTC data.

Latest CFTC data show open interest in WTI contracts declined in November in both futures‐only and
futures and futures‐equivalent options (hereafter combined) to 1.342 million and 2.389 million
contracts, respectively. Producers decreased their net long position during the month of November; they
held 25.5% of the short and 15.3% of the long contracts in WTI futures‐only contracts. Swap dealers, who
accounted for 29.8% and 32.5% of the open interest on the long side and short side, respectively,
switched to a net short position after reducing their net long position by 56 000 contracts from last
month’s net long position of 20 000 futures contracts.
'000 NYMEX WTI Mth1 '000 Net Positions in WTI Futures

Contracts Open Interest $/bbl
contract Source: CFTC, NYMEX $/bbl
1,600 100 300 90
1,500 90 85
1,400 80 100
1,300 70 80
1,200 60 -100
75
1,100 50
1,000 Source: CFTC, NYMEX 40 -300 70
900 30 21 Sep 05 Oct 19 Oct 02 Nov 16 Nov 30 Nov
Producers Swap Dealers
Jan 09May 09Sep 09 Jan 10May 10Sep 10
Money Managers Other Reportables
Open Interest NYMEX WTI Mth1 Non-Reportables NYMEX WTI

Managed money traders’ net long exposure declined by close to 17% in November, to 152 000 futures
contracts. In line with the decline in their position, the market share of managed money traders has
fallen from 30.2% to 28.2% on the long side and from 17.8% to 16.9% on the short side. Other
non‐commercials, who accounted for 20% of open interest on both long and short sides, remained net
short in the market, although they reduced their net short position significantly.

Open interest declined in the NYMEX RBOB futures and combined markets. Producers continued to hold
the largest long and short positions in the market, controlling 73.2% and 33.2% of open interest on the
short side and long side, respectively. Swap dealers, managed money traders, and other reportables as
well as non‐reportables continue to provide liquidity in the market by holding respectively 18.9%, 33.3%,
7.3% and 7.3% of open interest on the long side. In November, open interest in NYMEX heating oil and
natural gas markets declined, respectively, by 5.8% to 300 900 contracts and 5% to 758 700 contracts.

Meanwhile, final data for October show the influx of commodity index money in futures and over‐the‐
counter (OTC) markets increased for the month in the long side to a notional value of $254.7 billion while
decreasing to $187.4 billion in net notional value. Index investors withdrew US$0.4 billion from the WTI
futures market in October 2010, which fell to 629 000 futures equivalent contracts.
Positions on NYMEX Light Sweet Crude Oil (WTI) Futures Contracts
Thousand Contracts
30 November 2010 Long Short Net Long/Short

Δ Net from Prev. Δ Net Vs Last
Week Month
Producers' Positions 205.7 342.3 -136.6 Short Ï 5.3 Ï 27.9
Swap Dealers' Positions 218.9 254.8 -36.0 Short Ð -12.3 Ð -56.0
Money Managers' Positions 223.2 71.1 152.1 Long Ï 25.2 Ð -25.7
Others' Positions 88.2 93.4 -5.2 Short Ð -19.7 Ï 42.5
Non-Reportable Positions 88.8 63.1 25.7 Long Ï 1.5 Ï 11.2
Open Interest 1342.3 Ï 11.1 Ð -91.0
Source: CFTC

Regulatory Overhaul in the Over-the-Counter Market
The onset of the financial crisis from the autumn of 2008 triggered frantic efforts by policymakers around
the globe to tighten regulations in order to reduce systemic risk and increase transparency in the market
place. This was especially the case for over‐the‐counter (OTC) markets, where a wide range of instruments
are traded, including commodities. Instruments in the OTC markets are generally privately negotiated
between market makers (or so called swap dealers) and their clients. Unlike standardised exchange traded
products, OTC instruments can be customised to fit clients’ needs. These instruments can be used to hedge
exposure to the physical asset itself, or to make speculative profits if prices of the underlying asset move in
an expected direction. According to the latest Bank of International Settlements (BIS) survey, the total
notional value of all OTC derivatives reached $583 trillion at end‐June 2010, of which $2.85 trillion (0.5%)
was in commodity‐related derivatives. At their peak in end‐June 2008, the total notional value of
commodity‐related derivatives had reached $13 trillion, or 2% of the total market.
Because it primarily deals with privately‐negotiated contracts, the OTC derivatives market is essentially
opaque, in the sense that information is typically available only to the negotiating parties. Some argue that
the lack of public information in the market
prevents an appropriate assessment of overall USD Notional Amounts Outstanding
Trillions of OTC Derivatives
risks by market participants and precludes them 800
So urce: B IS
from taking the necessary measures against
default risks. The financial crisis has brought the 600
OTC derivatives market to the forefront of the 400
regulatory debate and has highlighted the
200
importance of international coordination.
0
In 2009, the G20 declared the need for more 1H98 2H99 1H01 2H02 1H04 2H05 1H07 2H08 1H10
robust supervision and regulation of the Foreign exchange Interest rate
international financial system, including Equity-linked Com m odity
international regulatory standards. According to Credit default sw aps Unallocated
the statement of the G20 leaders following their
meeting in Pittsburgh in September 2009: “All standardised OTC derivatives contracts should be traded on
exchanges or electronic trading platforms, where appropriate, and cleared through central counterparties by
end‐2012 at the latest. OTC derivative contracts should be reported to trade repositories. Non‐centrally
cleared contracts should be subject to higher capital requirements.”

Overhaul in the Over-the Counter-Market (continued)

Following the G20 agreement, the US financial reform package, known as the Dodd‐Frank Wall Street
Reform and Consumer Protection Act (Dodd‐Frank Act), became law on 21 July 2010. Shortly thereafter, on
15 September 2010, the European Union also unveiled its proposal for regulation of OTC derivatives, central
counterparties and trade repositories. The main goal is to increase transparency and efficiency of the OTC
derivatives markets and to reduce potential counterparty and systemic risks through:
Comprehensive regulation of swap dealers and major swap participants to minimise systemic risk, via
registration, capital and margin requirements and standards of conduct;
Standardising as many swaps as possible;
Clearing requirements for standardised swaps through an intermediary company with sufficient capital,
such as clearing houses, or central counterparties (CCPs) to eliminate counterparty risk. Mandatory
clearing requirements will not apply to existing swaps; however they still need to be reported to swap
data repositories or directly to regulators;
Trading standardised swaps on designated contract organisations or swap execution facilities, where
multiple traders can place bids and offers;
Real time reporting for cleared and uncleared swaps to centralised swap data repositories;
Exempting end‐users using swaps to hedge or mitigate commercial risk from mandatory clearing; and
Imposing aggregate position limits and large trader reporting requirements for swaps.
Although the US and European reform packages entail very similar regulatory frameworks, there are several
differences between the two. First, the European proposal does not make any reference to the extent of the
mandatory exchange trading for standardised swaps. Therefore, financial entities and non‐financial entities,
which exceed the information threshold level, will have the obligation to report to a trade repository no
later than one working day after the trade. Additionally, non‐financial entities whose trade size is below the
information threshold level are not required to report their transactions. In contrast to the European
retroactive reporting requirement, the US CFTC proposed real time reporting (as soon as technologically
practical) for both on‐exchange and off‐exchange swap transactions, including a provision for a 15‐minute
delay for block trades. Second, the European proposal does not have components such as the Volcker Rule,
which in the US will prohibit banks from proprietary trading. Third, the European proposal does not set a
cap on ownership of clearinghouses, which in the US is set at 40% of clearinghouse ownership by financial
institutions. Finally, the European proposal does not have position limits in their regulation but these are
expected to be included later. The US CFTC is expected to announce its position limits for energy futures and
swaps on 16 December 2010.
Regulating an inherently dynamic industry is a complex and difficult task. Regulators themselves express
uncertainty over what the new rules will bring to the market. Market participants have already raised
concerns over some of the issues in the rulemaking process. Their main concerns are:
Swaps are not futures: They argue that the OTC market is different from the futures markets and
therefore should not be regulated in an identical fashion.
Standardisation and exchange trading: Swaps can trade infrequently, often in significant sizes, between
dealers and end‐users or speculators. If trading activity in the futures markets is any evidence, a relatively
very small number of highly liquid instruments have been effectively traded on the exchange. The failure
rate of exchange trading models especially in less liquid instruments has been very high.
Low liquidity: Liquidity in OTC markets is generally provided by the dealers, who use their own capital to
make the markets. Market participants contend that the Volcker rule has the potential to change the
structure of the market by lowering liquidity. Notwithstanding the potential for diminished risk to lead to
lower interest rates, if liquidity were to decline due to margin requirements, clearing costs or any other
clause in the regulation, the process of price discovery and the risk transfer function of these markets
would be significantly compromised.
Increase in end‐user costs: There are end‐user complaints about costs possibly increasing due to the fact
that the counterparty might transfer some of the clearing costs to end‐users, in addition to uncertain margin
requirements. As one regulator noted, if the regulatory framework replaces a system of ‘too big to fail’ with
a system of ‘too costly to clear’, market efficiency is hardly likely to be improved. The debate continues.

Spot Crude Oil Prices

Spot crude prices rose in tandem with stronger refiner demand in November and strengthened further
on the back of early‐December cold weather. Distillate‐rich crudes such as Nigerian grades were also
bolstered by winter‐related demand for heating oil and strong Chinese demand for diesel.

$/bbl Benchmark Crude Prices $/bbl Asian Benchmark Crude Prices
95 95
90 90
85 85
80 80
75 75
70 70
Source: Platts Source: Platts
65 65
Nov 09 Feb 10 May 10 Aug 10 Nov 10 Jan 10 Mar 10 May 10 Jul 10 Sep 10 Nov 10
WTI Cushing Dated Brent Dubai ESPO Blend Oman Dubai

In November, spot prices for benchmark grades were up on average by 2.8% to 4.3%. Strong Asian
demand for heavier Mideast crudes saw Dubai spot prices up by $3.44/bbl to $83.65/bbl in November,
Dated Brent up by a smaller $2.58/bbl to an average $/bbl ESPO differentials
$85.33/bbl while US WTI posted the smallest month‐ 3
on‐month increase at $2.31/bbl to $84.20/bbl. 2
1
Spot crude markets in Asia were relatively stronger 0
than other major regions, in part due to higher -1
seasonal demand but also to brisk spot purchases by
-2
China. Prices for distillate‐rich crudes as well as other Source: Platts
-3
Mideast heavy crudes were supported further in
Jan 10 Mar 10 May 10 Jul 10 Sep 10 Nov 10
early December after Saudi Aramco raised its prices ESPO vs Dated Brent
for all grades to Asia amid a cutback of sales of its ESPO vs Dubai
ESPO vs Oman
Arab Heavy crude.

Spot Crude Oil Prices and Differentials
Table Unavailable
Available in the subscription version.
To subscribe, visit: http://www.iea.org/w/omrss/default.aspx

Stronger demand for light sour crudes also supported increased spot prices for Russian ESPO crude. ESPO
Blend’s premium above Dubai crude has gone from strength to strength over the past six months and
posted another record in early December, trading around $2.50/bbl compared to an average $1.89/bbl
in November, $1.05/bbl in October, $0.64/bbl in September and $0.19/bbl in August.

Spot Product Prices
Gasoil prices surged with the onset of colder weather in the Northern Hemisphere but were still largely
eclipsed by relatively stronger crude prices. As a result, crack spreads declined in Europe and only
managed to post modest improvements on average in the US and Singapore for the month. Indeed,
despite the colder weather, stubbornly high inventories are keeping a cap on European and US spot
gasoil prices.

$/bbl Gasoil/Heating Oil $/bbl Gasoline
Cracks to Benchmark Crudes Cracks to Benchmark Crude s
16 27
Source: Platts
14 22
12
10 17
8 12
6
7
4
Source: Platts
2 2
Nov 09 Feb 10 May 10 Aug 10 Nov 10 Nov 09 Feb 10 May 10 Aug 10 Nov 10
NWE Gasoil 0.1% NYH No. 2 NWE Unl 10ppm NYH Unl 93
Med Gasoil 0.1% SP Gasoil 0.5% Med Unl 10ppm SP Prem Unl

US gasoline cracks, especially for premium grades in New York, remained counter‐seasonally robust, in
part reflecting reduced refinery yields as refiners increased their heating oil output. The crack spread for
unleaded gasoline in New York rose to $9.52/bbl in November compared with an average of $8.18/bbl in
October. Cracks for premium grades were nearly double those levels, averaging $16.70/bbl in November
compared to $13.57/bbl in October.

Naphtha
In Asia, crack spreads were mixed, with light ends and $/bbl Cracks to Benchmark Crudes
middle distillates improving month‐on‐month while fuel 8
6
oil weakened further in November. China’s surging 4
demand for diesel and gasoil is also lending considerable 2
support to regional middle distillate markets. Chinese 0
-2
government mandates to meet emissions reductions -4
and energy efficiency targets by the year‐ended in -6
-8
February have seen a surge in diesel and gasoil demand -10 Source: Platts
at the expense of coal. As part of the conservation Nov 09 Feb 10 May 10 Aug 10 Nov 10
efforts, power rationing has forced companies to burn NWE SP
Med CIF ME Gulf
diesel in their own generating sets.

Meanwhile, naphtha cracks in Asia continued to improve in November on the back of strong
petrochemical demand in line with stronger economic activity. In Singapore, naphtha cracks rose to
$3.61/bbl in November compared to $2.75/bbl in October and a loss of $0.60/bbl in September.


Spot Product Prices
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Refining Margins
Refinery margins fell slightly on average in all regions in November. In general, volatility was high with
margins dropping at the beginning of the month before strengthening again. While margins in Northwest
Europe, US West Coast and Singapore were more or less unchanged versus last month, Mediterranean
and US Gulf coast margins dropped by around $1/bbl.

$/bbl NWE Refining Margins $/bbl USGC Refining Margins
8 10
6 8
4 6
2 4
0 2
-2 0
-4 -2
-6 -4
-8 -6
Jan 10 Mar 10 May 10 Jul 10 Sep 10 Nov 10 Jan 10 Mar 10 May 10 Jul 10 Sep 10 Nov 10
Brent Cracking Brent H'skimming Maya (Coking) LLS (Cracking)
Urals Cracking Urals H'skimming Mars (Coking) Brent (Cracking)


Selected Refining Margins in Major Refining Centres

($/bbl)
Monthly Average Change Average for week ending:

Sep 10 Oct 10 Nov 10 Nov 10-Oct 10 05 Nov 12 Nov 19 Nov 26 Nov 03 Dec
NW Europe Brent (Cracking) 1.73 2.82 2.61 Ð -0.20 1.68 2.18 2.70 3.42 3.59
Urals (Cracking) 1.63 2.95 2.84 Ð -0.12 1.90 2.59 2.86 3.51 4.03
Brent (Hydroskimming) -0.45 0.12 -0.08 Ð -0.20 -0.65 -0.24 0.04 0.35 -0.08
Urals (Hydroskimming) -3.12 -2.44 -2.61 Ð -0.17 -3.12 -2.64 -2.54 -2.29 -2.68
Mediterranean Es Sider (Cracking) 0.14 1.80 0.97 Ð -0.83 0.54 0.89 0.84 1.39 1.33
Urals (Cracking) 0.04 2.16 0.95 Ð -1.21 0.47 0.85 0.81 1.43 1.53
Es Sider (Hydroskimming) -4.09 -3.74 -4.57 Ð -0.82 -4.42 -4.51 -4.76 -4.60 -5.14
Urals (Hydroskimming) -5.82 -4.61 -6.11 Ð -1.50 -6.08 -6.08 -6.33 -6.01 -6.57
US Gulf Coast Bonny (Cracking) -1.34 -1.58 -2.58 Ð -1.00 -2.94 -1.96 -2.87 -2.58 -1.65
Brent (Cracking) -2.79 -2.99 -3.87 Ð -0.88 -4.36 -3.45 -4.11 -3.60 -3.32
LLS (Cracking) -0.85 -0.64 -1.48 Ð -0.83 -2.35 -1.38 -1.29 -0.95 -1.06
Mars (Cracking) -0.17 -0.14 -0.85 Ð -0.71 -1.75 -1.20 -0.21 -0.26 -0.93
Mars (Coking) 1.71 1.79 1.48 Ð -0.31 0.18 1.06 2.33 2.31 1.74
Maya (Coking) 4.26 3.90 3.99 Ï 0.09 2.68 3.63 4.60 4.98 4.59
US West Coast ANS (Cracking) 0.03 -1.13 -1.11 Ï 0.02 -2.48 -2.39 -0.37 0.11 1.05
Kern (Cracking) 4.12 1.27 1.34 Ï 0.07 0.88 -1.66 1.77 3.72 3.81
Oman (Cracking) -0.81 0.24 -2.68 Ð -2.92 -2.19 -3.14 -3.79 -2.23 0.58
Kern (Coking) 9.86 9.69 7.57 Ð -2.12 7.17 6.65 7.07 8.89 11.27
Singapore Dubai (Hydroskimming) -2.23 -1.96 -2.45 Ð -0.48 -3.36 -2.43 -2.23 -2.08 -1.70
Tapis (Hydroskimming) -4.89 -4.74 -4.79 Ð -0.05 -5.91 -5.53 -4.50 -3.66 -3.81
Dubai (Hydrocracking) -0.15 0.77 0.63 Ð -0.14 -0.46 0.56 0.88 1.14 1.77
Tapis (Hydrocracking) -3.47 -2.75 -2.40 Ï 0.35 -3.57 -2.99 -2.11 -1.36 -1.65
China Cabinda (Hydroskimming) -4.72 -4.28 -4.33 Ð -0.05 -6.17 -5.07 -3.45 -3.35 -2.68
Daqing (Hydroskimming) -3.94 -3.72 -3.75 Ð -0.03 -4.55 -4.82 -3.64 -2.68 -1.95
Dubai (Hydroskimming) -2.01 -1.74 -2.23 Ð -0.49 -3.16 -2.22 -2.02 -1.86 -1.47
Daqing (Hydrocracking) -1.07 0.24 0.87 Ï 0.63 0.05 -0.05 0.96 1.85 2.69
Dubai (Hydrocracking) 0.14 1.08 0.95 Ð -0.13 -0.16 0.88 1.22 1.47 2.15
For the purposes of this report, refining margins are calculated for various complexity configurations, each optimised for processing the specific crude in a specific refining centre on a 'full-
cost' basis. Consequently, reported margins should be taken as an indication, or proxy, of changes in profitability for a given refining centre. No attempt is made to model or otherwise
comment upon the relative economics of specific refineries running individual crude slates and producing custom product sales, nor are these calculations intended to infer the marginal
values of crudes for pricing purposes.
*The China refinery margin calculation represents a model based on spot product import/export parity, and does not reflect internal pricing regulations.
Sources: IEA, Purvin & Gertz Inc.

In Northwest Europe, November margins were nearly unchanged against October. Margins declined at
the start of the month as the strike at the French refineries came to an end in late October, taking the
pressure off products. However, they moved higher throughout November as especially middle
distillates cracks improved due to increased weather‐related heating oil demand. Gasoline crack spreads
also improved, partly due to high import demand from Nigeria. In the Mediterranean though, margins
fell on average as the Urals discount was lower than usual due to tight supply.

On the US Gulf, November cracking margins fell by around $1/bbl, whereas coking margins moved
sideways. The large drop in margins in the beginning of the month was a result of products cracks,
especially gasoline, increasing at a slower pace than crude feedstocks. Coking margins fared generally
better as Mars and Maya crudes were trading at larger discounts in November. Generally, throughout
the month margins were lifted by stronger gasoline and middle distillates cracks as supplies tightened
with falling US stock levels for both products.

In the US West Coast, cracking margins based on domestic crudes moved sideways, but the Oman
cracking margin fell almost $3/bbl. The Kern coking margin also dropped, by around $2/bbl. Oman was
trading at a lower discount than usual, as strong demand from, among others, China pushed Middle East
crude prices higher in November. Coking margins by contrast were depressed due to a weak gasoline
crack in the first part of the month.

In Singapore, margins were roughly unchanged on average in November. Dubai hydroskimming margins
decreased by around $0.50/bbl as fuel oil cracks improved less than gasoline and middle distillates cracks
throughout the month. Also Chinese margins were broadly unchanged, following the same monthly
pattern, with margins dropping at the start of the month before strengthening on the back of higher
gasoline and middle distillates cracks.

End-User Product Prices in November
In November, IEA end‐user prices rose by 1.19% in US dollars, ex‐tax. On the same basis, average IEA
prices rose for gasoline (+2.13%) and diesel (+2.59%), while heating oil (+0.28%) and low‐sulphur fuel oil
(‐0.22%) stayed at similar levels as the previous month.
End-User Product Prices
Compared to a year ago, average IEA‐region prices Monthly Changes in USD, ex-tax
were 8.6% higher. In Europe, the largest average price 7.0%
changes were observed in the UK (+3.67%) and 6.0%
2.6%
5.0%
Germany (+1.87%). On the other side of the Atlantic, 2.1%
4.0%
data indicate average price increases over the previous
3.0%
month in Canada (+3.98%) and the US (3.75%). In Japan 0.3%
2.0%
gasoline prices decreased by 0.91% and diesel -0.2%
1.0%
increased marginally by 0.29%. 0.0%
-1.0%
Gasoline and diesel price increases were nonetheless -2.0%
slower than in October. IEA end‐user diesel prices Gasoline Diesel Heat.Oil LSFO
observed a 7.0% and 2.59% increase, respectively, over France Germany Italy
Spain United Kingdom Japan
the last two months showing pressure from a tighter Canada United States Average
market, due to higher than expected demand increases
in China. Interestingly the Northern Hemisphere winter products, heating oil and low‐sulphur fuel oil
observed little change in most countries during November with the exception of Canada and the UK,
where end‐user heating oil prices gained 2.06% and 1.63% respectively.

Freight
Benchmark dirty tanker rates maintained their recovery in November. Suezmax rates fared extremely
well after weather‐related delays in the Bosporus Straits tied up vessels in the Mediterranean, which had
knock‐on effects elsewhere. The benchmark West Africa – US Atlantic coast rate rose steadily from
$10/mt to over $18/mt by month‐end. In comparison, rates on the benchmark VLCC Mideast Gulf –
Japan route were volatile, initially surging to over $15/mt by early‐November on the back of increased
Chinese demand, but then fading on low enquiries following the Eid‐al‐Adha holiday. By month‐end,
VLCC rates had fallen back to end‐October levels. In the Aframax market, the aforementioned Bosporus
delays buttressed rates mid‐month in the Mediterranean and North West Europe. While in early
December, rates soared on the North Sea – Northwest Europe trade after the market anticipated tight
ice‐class vessel availability with the onset of ice in the Baltic.

Product tankers experienced a similar resurgence in November as all benchmark rates strengthened over
the course of the month with the typically volatile East of Suez and transatlantic trades experiencing the
sharpest climbs. Rates on the benchmark Arabian Gulf – Japan route increased steadily from $17/mt to
almost $25/mt by early December, reflecting increased shipments of gas/diesel oil into China and
naphtha into Japan. The transatlantic North Sea – US Atlantic coast route surged from $14/mt in mid‐
month to $25/mt by early‐December after an arbitrage window opened to send gasoline into PADD 1
with Atlantic basin tonnage consequently tightening.


Daily crude oil tanker voyage freight Daily product tanker voyage freight
US$/m t rates US$/m t rates
28 35
24 30
20 25
16 20
12 15
8 10
4 5
So urce: P latts
0 So urce: P latts 0
Jan 09 Jul 09 Jan 10 Jul 10 Jan 09 Jul 09 Jan 10 Jul 10
8 0 k t N S e a - N W E ur 13 0 k t W A f r- US A C 3 0 K C a rib - US A C 2 5 K UKC - US A C
V LC C M E G ulf - J a p 75K M EG-Jap 3 0 K S E A s ia - J a p

Floating storage of crude and products experienced a slight rise of 5.8 mb to stand at 64.4 mb at
end‐November. This build was led by a 5.5 mb rise in crude to 37.6 mb, while products increased by
0.3 mb to 26.8 mb. On a regional basis, one ULCC Global crude floating storage
mb
began storing 3.1 mb of crude off Brazil and 2.2 mb (short-term and semi-permanent)
was stored off Northwest Europe, with neither area 175 So urce: EA Gibso n, SSY and
155 IEA estimates
having previously accounted for substantial crude
floating storage. Data suggest that Iranian storage fell 135
by 1.9 mb to 21.7 mb. Products held off West Africa 115
increased to 10.9 mb (+3.2 mb), offsetting falls in the 95
Mediterranean (‐2.8 mb) and Northwest Europe 75
(‐0.1 mb). Following the increase in oil held at sea, 55
the storage fleet expanded to 50 vessels, comprising Jan Mar May Jul Sep Nov
R a nge 2 0 0 5 - 0 9 2009
18 ULCC/VLCCs, 1 Suezmax, 28 LR2/Aframaxes and 2 0 10 A v e ra ge 2 0 0 5 - 0 9
3 LR1/Panamaxes.


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

Summary
• 3Q10 global crude throughputs have been revised lower by 90 kb/d since last month’s report, on
slightly weaker than expected runs in Brazil and Taiwan in September. At an average of 75.6 mb/d,
3Q10 global crude runs were nevertheless more than 2.0 mb/d higher than a year earlier, with gains
evenly split between the OECD and the non‐OECD.

• Global crude runs are set to fall sharply in 4Q10, in line with seasonal trends, but amplified by strikes
in France in October and an expected slowdown in global demand growth. Global throughputs are
estimated at 73.8 mb/d, 1.8 mb/d less than 3Q10, but still a healthy 1.3 mb/d above a year ago.

• OECD refinery crude runs fell by 2.3 mb/d in October, to average only 34.6 mb/d, or 45 kb/d below
our previous forecast. Peak seasonal maintenance in the Pacific and North America coincided with
industrial action in France, to take regional runs to their lowest level since June 1993. Weekly data
point to a partial rebound in November, though constrained due to weak margins.

• Despite a few more refinery closures in the OECD and a continued bleak outlook for the refining
industry, global crude distillation capacity additions are now seen at 9.2 mb/d by 2015, or 200 kb/d
higher than in the June 2010 MTOGM. While significant surplus capacity persists, a higher demand
profile and lower NGL supplies bypassing the refining system provide a slightly improved outlook for
refiners in the medium term.

Global Refining Global Throughputs vs. Demand
mb/d Crude Throughput mb/d Annual growth
77 3.0
76
2.0
75
1.0
74
0.0
73
-1.0
72
-2.0
71
-3.0
Jan Mar May Jul Sep Nov Jan
Range 05-09 Average 05-09 1Q05 1Q06 1Q07 1Q08 1Q09 1Q10 1Q11
2010 2011 Crude Runs Demand

Global Refinery Throughput
Global refinery throughputs have been revised lower by about 100 kb/d for both 3Q10 and 4Q10
following weaker‐than‐expected non‐OECD runs in September and October. In September, continued
problems at Taiwan’s 540 kb/d Formosa refinery following a fire in August seem to have lingered on,
while Brazilian runs were lower on prolonged maintenance. In October, lower Russian and Indian runs,
also due to maintenance, dragged down total levels, already depressed by French strikes. At 75.6 mb/d
and 73.8 mb/d for 3Q10 and 4Q10, respectively, global crude runs are nevertheless showing significant
annual growth. While 3Q10 was more than 2 mb/d higher than the same period a year earlier, and with
gains evenly split between the OECD and the non‐OECD, growth is expected to slow somewhat in 4Q10,
to 1.3 mb/d. October OECD data were already exceptionally weak, both on a monthly and annual
comparison, in part due to unplanned outages. While OECD runs have already partly recovered from
October lows, and could be further boosted by freezing temperatures, 4Q10 annual OECD growth is seen
slowing to just over 0.3 mb/d. The non‐OECD, led by China, however, continued to post record runs in
October sustained by high demand for diesel, and 4Q10 non‐OECD runs are expected to retain 1 mb/d
annual growth and reach 38.2 mb/d in the last quarter of the year, slightly higher than in 3Q10.

I NTERNATIONAL E NERGY A GENCY ‐ O IL M ARKET R EPORT R EFINING
Global Refinery Crude Throughput1

Aug 10 Sep 10 3Q2010 Oct 10 Nov 10 Dec 10 4Q2010 Jan 11 Feb 11 Mar 11 1Q2011
North America 18.1 17.6 18.1 16.6 17.0 17.2 16.9 17.0 16.9 17.3 17.1
Europe 12.9 12.7 12.8 11.6 12.1 12.3 12.0 12.3 12.3 12.5 12.4
Pacific 6.8 6.6 6.5 6.3 6.8 7.0 6.7 7.0 7.0 6.6 6.9
Total OECD 37.8 36.9 37.5 34.6 35.9 36.4 35.6 36.3 36.2 36.4 36.3
FSU 6.7 6.6 6.6 6.3 6.3 6.4 6.4 6.4 6.5 6.4 6.4
Non-OECD Europe 0.7 0.6 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7
China 8.2 8.5 8.4 8.8 8.8 8.7 8.8 8.6 8.7 8.8 8.7
Other Asia 8.6 8.5 8.7 8.8 8.6 8.8 8.8 8.8 8.9 8.8 8.8
Latin America 5.2 5.1 5.2 5.1 5.3 5.3 5.2 5.1 5.1 5.1 5.1
Middle East 6.3 6.2 6.2 6.1 6.1 6.0 6.1 6.1 6.1 5.9 6.0
Africa 2.5 2.4 2.5 2.4 2.3 2.3 2.3 2.3 2.3 2.2 2.3
Total Non-OECD 38.2 37.9 38.1 38.1 38.2 38.3 38.2 38.1 38.4 38.0 38.1
Total 75.9 74.8 75.6 72.6 74.0 74.8 73.8 74.4 74.6 74.4 74.5
1 Preliminary and estimated runs based on capacity, known outages, economic run cuts and global demand forecast

Medium-Term Update: Refinery Closures Fail to Dent Global Capacity Additions
Despite a few more refinery closures in the OECD since our June MTOGM, and a continued bleak outlook for
the refining industry, global crude distillation capacity additions are revised slightly up for the forecast
period. Total crude additions are now seen at 9.2 mb/d from 2009‐2015, or 200 kb/d higher than our
previous report. Global upgrading and desulphurisation additions are also significant, at 7.3 mb/d and
8.0 mb/d, respectively. While significant surplus capacity persists, a higher demand profile and lower NGL
supplies bypassing the refining system provide a slightly improved outlook for refiners in the medium term.
Since our June report, a further 640 kb/d of capacity has been announced shut, mostly in the OECD. Total
refinery closures now amount to 2.0 mb/d since 1Q2009, including Valero’s Aruba refinery but excluding the
Delaware (US) plant, which is set to restart in 2011. Since the last update, we have included the closure of
Western Refining’s 70 kb/d Yorktown (US) in 3Q10, Flying J’s 70 kb/d Bakersfield (US) (2Q10), Tamoil’s
94 kb/d Cremona (I) (2Q11), Petroplus’ 80 kb/d Reichstett (Fr) from 1Q11 and an already idled 52 kb/d CDU
at Fuji Oil’s Sodegaura (J). Outside of the OECD, the planned closure of the 200 kb/d Kaohsiung refinery in
Taiwan (4Q2015) has been incorporated in this assessment. State‐run CPC Corp. pledged to close it by 2015
in exchange for local residents allowing the company to build an ethylene plant on the site and started
decommissioning five units on 1 September of this year.
kb/d Crude Distillation Capacity Additions kb/d Revisions to CDU Capacity

2.5 0.5
2.0 0.3
1.5
0.0
1.0
0.5 -0.3
0.0 -0.5
-0.5
-0.8
2010 2011 2012 2013 2014 2015
2010 2011 2012 2013 2014 2015
OECD China OECD China
Other Asia Middle East Other Asia Middle East
Latin America Other Non OECD Latin America Other Non OECD

OECD crude distillation capacity is nevertheless expected to increase overall in the 6‐year period. In addition
to expansions already included (for Poland, Spain and Greece), a new grassroots project in Turkey has been
included since the last report. The 200 kb/d Aliaga JV refinery between Turcas and Socar was finally
approved and construction is due to start in 2011. It will be integrated with an existing petrochemical plant,
and is slated to process Azeri BTC blend and is scheduled for completion in 2014/2015.


Medium-Term Update: Refinery Closures Fail to Dent Global Capacity Additions (continued)
Globally, growth in refinery distillation capacity remains dominated by China, which alone accounts for 38%
of additions in the six‐year period, but significant uncertainty remains. As before, we highlight the difficulty
in tracking projects and their status, but assume that Beijing will aim to approve enough projects to remain
self‐sufficient in light product demand. Beijing’s concern about oversupply means that regulators may delay
approving new projects, however, and we have slipped a few projects as some approvals are still pending.
Yet many projects are moving ahead and China’s Ministry of Environmental Protection (MEP) approved a
further two involving foreign investors in September; the 300 kb/d Sinopec/KPC refinery in Zhanjiang and
CNOOC’s 200 kb/d expansion of its Huizhou refinery. While Huizhou is not expected to be completed until
2016 or later, we expect the Zhanjiang plant to be brought on line in 2015, one year later than in our last
report. CNPC began levelling ground in the south‐western Yunnan province in October and we have
subsequently included the proposed 200 kb/d Anning refinery as likely for completion in 2014. The
$3.4 billion project plans to source its feedstock from the new pipeline from Myanmar, scheduled for
completion in 2013. Construction also started at the CNPC/Rosneft refinery in Tianjin in September. The
refinery will receive 70% of its feedstock from Russia, via the ESPO pipeline and the rest from Middle Eastern
countries. Although PetroChina does not yet have final approval for its 400 kb/d Jieyang refinery, a joint
venture with Venezuela’s PDV, the National Development and Reform Commission (NDRC) has given
preliminary approval, and we continue to include the project in our capacity list (though now only assumed
completed in 2015). Sinopec has reportedly dropped Caofeidian from its list of planned refineries in its next
five‐year plan. The company says another refinery would swamp regional markets so we have taken it out of
our list (2015). Share of CDU Capacity growth
We have also made several changes to our estimates for Other
Asia. Following a detailed project review, India’s Essar is planning 12% 7%
to augment distillation capacity by 80 kb/d at its Vadinar refinery
12%
by 2011, and a further 40 kb/d in 2012 through debottlenecking
and by optimising certain units. Indian Oil Corp completed its 38%
15%
60 kb/d expansion of its Panipat refinery in September, while
Bharat Petroleum’s new $2.5 billion Bina refinery started full 16%
commercial operations also in September (we expected it in
1Q11). BPCL’s 40 kb/d expansion of the Kochi refinery was
successfully completed in August 2010 and HPCL/Mittal’s OECD China
Other Asia Middle East
Bathinda grassroots refinery is on track to start processing from
Latin America Other Non OECD
April 2011.
The completion of Vietnam’s second refinery, the proposed 80 kb/d Nghi Son plant, has officially been
delayed from 2013 to 2014, but in line with our previous assumptions. State‐owned PetroVietnam and
Japanese Idemistu Kosan expect to award EPC (Engineering, Procurement and Construction) this month, three
months later than originally planned. Although the country’s third proposed refinery, the Vung Ro refinery in
Phu Yen, seems to be progressing, we have shifted likely completion date from 2015 to 2016 or later.
Elsewhere, although substantial changes are minimal, adjustments have been made to some likely
completion dates. For instance, we only expected Tatneft’s new Nizhnekamsk refinery, which was launched
on 26 October, to start operations in 2012. The 140 kb/d refinery is the first large‐scale refinery built since
the dissolution of the Soviet Union and will be a 15 on the Nelson Complexity Index. Rosneft announced in
November that its Board of Directors had approved the plan to build a 200 kb/d refinery as well as a
petrochemical plant in Nakhodka, close to Kozmino, the end point of the second stage of the ESPO pipeline
currently being built. The refinery is currently only slated for completion in 2017 however. The company also
announced it is planning a 20 kb/d refinery in Grosny, in the Chechen Republic.
In Latin America, progress on Brazil’s impressive expansion projects seems to be in line with plans. We
expect Brazil to add 0.8 mb/d by 2015, through the completion of the first phase of Comperj (165 kb/d in
2014), Abreu e Lima (230 kb/d in 2013) and the first phase of Maranhao in the northeast (300 kb/d in 2015).
In Cuba, a unit of China’s CNPC is set to begin a $6 billion expansion project at the Cienfuegos refinery,
expanding capacity from 65 kb/d to 150 kb/d and including an LNG terminal. The construction will start in
2011 and completion is expected by the end of 2013. Despite some progress made on projects in Nigeria,
Indonesia, Iraq and Mongolia, we continue to exclude these projects until more firm details materialise.

OECD Refinery Throughput

October OECD crude throughputs were sharply lower than a month earlier, as peak maintenance, poor
margins and industrial action in France coincided to drag OECD runs to their lowest level since June 1993.
At 34.6 mb/d, total OECD crude runs were an impressive 2.3 mb/d below September, and 3.2 mb/d
below August’s peak. Runs were lower in all regions, and only the Pacific maintained utilisation rates
above a year earlier. North American throughputs fell sharply, on heavy maintenance outages and poor
margins. Japanese autumn turnarounds equally peaked in October, though runs were sustained above
year‐ago, in part supported by strong export demand for diesel. In Europe, a complete halt to France’s
refining industry severely curtailed regional runs, and latest data suggests that refiners outside of France
did not materially boost runs to fill the supply gap, but rather drew stocks instead.

OECD runs are expected to recover in November and December as refiners exit turnarounds and
replenish stocks ahead of peak winter demand. Europe is already seeing very cold temperatures so far
this year supporting gasoil demand, while the Pacific continues to export diesel to China and
neighbouring countries. Weekly data for the US, Canada and Japan show throughputs recovering from
the seasonal low by mid‐November.

OECD Total kb/d
OECD
mb/d Crude Throughput Firm Shutdowns
41 5000
40 4000
39
38 3000
37 2000
36
1000
35
34 0
Range 05-09 Average 05-09
2010 2011 Range 06-09 Average 06-09
2009 2010 (est.)
2010 (est.)

Processing Gains Update
Since the last MTOGM we have revisited our refinery Processing Gains estimates for the 2009‐2015 period.
Processing gains are the volumetric amount by which total refinery output exceeds input for a given period
of time. This difference is due to the processing of crude oil and feedstocks into products, which, in total,
have a lower specific gravity due to cracking and other upgrading processes. Processing gains are thus
counted as supply in our global oil market balances (Table 1).
Normally, processing gains fall out from each run of the global/regional products supply model. Since the
December update looks at capacity only, and therefore does not systematically re‐calculate processing gains
by region, we have recalculated based on expected changes in oil demand and investments in cracking
capacity over the forecast period. Taking 2008 processing gains as a base, we have applied a composite
index of the changes to global demand and the upgrading ratio, or all cracking capacity over total crude
distillation capacity (in FCC equivalents), for subsequent years. Although this is a simplification, it does
capture the key drivers of processing gains
In all, we have raised 2010 global processing gains by 105 kb/d, and increased the 2015 total by 195 kb/d.
Processing gains now average 2.25 mb/d and 2.51 mb/d 2009 and 2015, respectively. A more
comprehensive review of processing gains will be undertaken ahead of the June 2011 MTOGM.


Refinery Crude Throughput and Utilisation in OECD Countries

Change from Utilisation rate1
May 10 Jun 10 Jul 10 Aug 10 Sep 10 Oct 10 Sep 10 Oct 09 Oct 10 Oct 09
US2 15.22 15.39 15.52 15.11 14.74 13.99 -0.75 -0.06 79.3% 80.5%
Canada 1.73 1.81 1.86 1.84 1.64 1.52 -0.12 -0.05 83.2% 80.5%
Mexico 1.23 1.20 1.21 1.15 1.20 1.08 -0.11 -0.20 64.2% 83.6%
OECD North Am erica 18.18 18.40 18.59 18.10 17.58 16.60 -0.98 -0.32 78.4% 80.7%
France 1.35 1.34 1.45 1.50 1.51 0.64 -0.86 -0.72 34.9% 68.5%
Germany 1.93 2.02 1.99 2.04 2.05 1.99 -0.06 0.00 83.5% 83.5%
Italy 1.58 1.81 1.76 1.69 1.73 1.69 -0.04 0.07 74.0% 70.9%
Netherlands 1.03 1.11 1.08 1.08 1.00 0.97 -0.02 0.02 80.6% 79.2%
Spain 0.90 1.20 1.14 1.11 1.11 1.02 -0.09 0.01 72.3% 77.3%
United Kingdom 1.45 1.49 1.47 1.45 1.43 1.41 -0.03 0.03 77.7% 77.2%
Other OECD Europe 3.70 3.99 4.07 4.02 3.86 3.91 0.04 0.13 80.0% 79.0%
OECD Europe 11.93 12.97 12.96 12.90 12.69 11.62 -1.06 -0.46 73.5% 76.8%
Japan 3.22 2.83 3.25 3.53 3.34 3.21 -0.14 0.07 70.7% 66.5%
South Korea 2.29 2.41 2.27 2.46 2.53 2.49 -0.04 0.16 91.1% 85.2%
Other OECD Pacific 0.66 0.68 0.68 0.77 0.76 0.64 -0.12 0.08 76.1% 69.4%
OECD Pacific 6.17 5.92 6.20 6.76 6.63 6.34 -0.29 0.32 78.2% 73.0%
OECD Total 36.28 37.29 37.75 37.75 36.90 34.56 -2.34 -0.46 76.7% 78.0%
1 Expressed as a percentage, based o n crude thro ughput and current o perable refining capacity
2 US50

North American refinery runs were even lower than preliminary data had indicated in October,
averaging 16.6 mb/d, or almost 1 mb/d below September (and a full 2 mb/d below July’s high). The very
steep monthly fall was due both to heavy maintenance and weak margins, and was spread across all
three countries.

The 120 kb/d downward revision to regional runs from last month’s report however came from Mexico,
which also saw a dip in rates, to 1.1 mb/d, from 1.2 mb/d a month earlier. In Canada, weekly data from
the National Energy Board show that Canadian crude throughputs fell by about 120 kb/d in the month,
to average only 1.5 mb/d. Shell announced it started shutting its 130 kb/d Montreal refinery in mid‐
September, with the phased shutdown expected to be completed by the end of October. A six‐week
maintenance programme at Canada’s largest refinery, Irving’s 300 kb/d plant at St. John, also
contributed to lower runs. Weekly data show Canadian runs recovering from the second half of
November onwards.

mb/d OECD North America m b/d US Weekly Refinery Throughput
Crude Throughput 17
19
16
18
15
17 14
13
16
12
Source: EIA
15
11
2010 2011 Range 05-09 Average 05-09
2009 2010
2010 (est.)

US crude runs dipped below 14 mb/d in early October for the first time in seven months, cutting capacity
utilisation to just 82%, and trended sideways throughout the month. High product stocks (of both
gasoline and diesel) capped refinery margins, while maintenance remained significant, at around
1.4 mb/d. The monthly decline of some 750 kb/d was almost evenly split between PADDs 1, 2 and 3,
which each saw runs curtailed by 200‐250 kb/d from September. Runs on the East Coast continued their
steep declines and were only 765 kb/d at the end of October (and 520 kb/d lower than July highs).

In November, total US crude runs were up by 190 kb/d, with the US Gulf Coast showing some strength,
despite lower margins. US East Coast refinery runs recovered from their recent record‐lows, as
maintenance at ConocoPhillips’ Trainer and Bayway refineries and United Refining’s Warren refinery was
completed. According to the EIA, crude distillation outages are expected to average 260 kb/d in
December and 620 kb/d in January, compared to 505 kb/d and 995 kb/d the same months a year ago.

m b/d US PADD 3 Refinery Throughputs m b/d US PADD 1 Refinery Throughputs
9.0 1.8
8.0 1.6
7.0 1.4
6.0 1.2
5.0 1.0
4.0 0.8
Source: EIA Source: EIA
3.0
0.6
2009 2010 2009 2010

October OECD European throughputs were 80 kb/d higher than our previous estimates, averaging
11.6 mb/d. As highlighted in last month’s report, the sharp decline from September (‐1.1 mb/d)
stemmed mostly from France where product supplies were severely disrupted due to industrial action at
ports, refineries and storage depots. In Spain, CEPSA officially launched the expanded Huelva refinery on
27 October. The 100 kb/d addition doubled crude distillation capacity and was aimed at increasing the
plant’s middle distillate yields. The expansion was completed at the end of the second quarter, but a
fatal accident at the plant on 4 August subsequently halted operations.

mb/d OECD Europe mb/d France
Crude Throughput Crude Throughput
14.4 1.9
13.9 1.7
13.4 1.5
12.9 1.3
12.4 1.1
0.9
11.9
0.7
11.4
0.5
2010 2010 (est.) 2008 2009 2010
2011 2010 est. 2011



Europe Prepares to Switch Off-road Diesel to 10 ppm
In line with the European Commission’s Fuel Quality Directive (FQD), European refiners are preparing to
switch off‐road diesel from a maximum permissible sulphur content of 1 000 ppm (allowed since Jan 2008) to
10 ppm from 1 January 2011. The lower sulphur limits applies to gas oils intended for use by non‐road mobile
machinery (including inland waterway vessels), agricultural and forestry tractors and recreational craft.
In order to accommodate minor contamination in the supply chain, member states may permit off‐road
diesel to contain up to 20 ppm of sulphur at the point of final distribution to end users. They may also allow,
until 31 December 2011, sales of gasoil containing up to 1 000 ppm sulphur for rail vehicles and agricultural
and forestry tractors, provided that they can ensure that the functioning of emissions control systems will
not be compromised. Certain derogations are also possible for the outermost regions (such as the French
overseas departments, the Canary Islands, Azores and Madeira), and for member states with severe
winter weather.
Furthermore, a 6‐month grace period (from January to June 2011) may be allowed by the authorities before
officially starting sampling of off‐road diesel to verify compliance. It seems, however, that fuel suppliers
intend to comply with the start date without a delay.
Several countries, such as Italy and Greece, already switched all diesel for transport, including off‐road
diesel, to 10 ppm since 1 January 2009. Both Spain and Belgium have stated that the enforcement date for
10 ppm off‐road diesel will be as scheduled and that they do not intend to use the FQD temporary
derogation. In Belgium, however, the process to enforce the new fuel specifications is through a royal
decree, and no such decree has yet been issued. Considering the current political situation in Belgium (that
is, only caretaker governance), implementation might be delayed. In France, while no decision has been
taken regarding a delay of the implementation of the higher fuel standards, the recent problems of the
refinery sector, may cause some minor delays in full implementation.

October OECD Pacific crude runs averaged 6.3 mb/d, down 290 kb/d from September. The decline was
mostly accounted for by Japan, due to maintenance, but runs also slipped in the other countries.
Australian throughputs fell 85 kb/d, to 575 kb/d. South Korean crude runs were also slightly lower,
though sustained at relatively high rates. South Korea’s crude imports hit 20‐month highs in October as
runs hovered around 2.5 mb/d, up 160 kb/d from a year‐ago. Most of the higher output went to meet
overseas demand as product exports rose to a two‐year high, as both Japan and China increased imports.

OECD Pacific mb/d South Korea
mb/d
Crude Throughput Crude Throughput
8.0
2.6
7.5
7.0 2.4
6.5
2.2
6.0
5.5
2.0
2010 2010 (est.) 2008 2009 2010
2011 2010 est. 2011

In Japan, crude throughputs fell to 3.2 mb/d in October, in line with seasonal trends and our previous
assessment. According to weekly data from the Petroleum Association of Japan (PAJ), runs rebounded
quite sharply in November as maintenance wound down and refiners started rebuilding stocks ahead of
the peak‐winter demand season. Runs were 355 kb/d higher than a month earlier, and 125 kb/d above
the same month a year ago. Despite numerous reports of Japanese refiners running at their highest
levels since February 2009, year‐on‐year gains in utilisation are exaggerated by lower capacity estimates.
According to the PAJ data, Japanese refinery capacity was reduced further in November, to 4.06 mb/d,
100 kb/d lower than October and 320 kb/d below the same time last year.

Refiners are reportedly planning to increase runs further in December, and Japan’s largest refiner, JX
Nippon Oil & Energy, announced its plans to raise runs by 2% above a year earlier, as domestic demand is
proving more resilient than many had feared. Refiners normally increase runs at this time of year to build
stocks and to meet the seasonal increase in demand for heating fuels. This year, however, kerosene
stocks are trending below their five‐year average and have not risen in line with seasonal trends.
Kerosene stocks normally peak at the end of November before the heating season starts, though this
year refiners have started drawing inventories earlier, perhaps suggesting that refiners will need to run
at higher levels than normal during the winter season to keep up with demand.

m b/d Japan Weekly Refinery Throughput Japan Weekly Refinery Utilisation
5.0 100%
4.5
90%
4.0
80%
3.5
3.0 70%
Source: PAJ
2.5 Source: PAJ
60%
Range 05-09 Average 05-09 Range 2005-09 5-yr Average
2009 2010 2009 2010

Non-OECD Refinery Throughput
Non‐OECD refinery crude throughputs continue to trend at the top of their historical range, driven by
strong demand growth and increased distillation capacity. 3Q10 non‐OECD runs are estimated to have
averaged 38.1 mb/d, almost 1 mb/d higher than a year earlier. Growth continues to be dominated by
China, which accounted for 55% of non‐OECD yearly growth in the quarter, but the FSU, Africa and the
Middle East also recorded significant annual increases. In 4Q10, runs are expected to remain relatively
flat, at just over 38 mb/d, as higher Chinese (and to a lesser extent Other Asian) runs are mostly offset by
seasonally lower throughputs in the FSU and Africa.

China
Non-OECD Total mb/d
mb/d Crude Throughput
Crude Throughput
9.0
39
38 8.5
37 8.0
36 7.5
35 7.0
34 6.5
33 6.0
32 5.5
Range 05-09 Average 05-09 Range 05-09 Average 05-09
2010 2010 est.
2010 2011
2011

Chinese refinery throughputs reached yet another record high in October. At 8.8 mb/d, crude runs were
920 kb/d higher than a year earlier and 230 kb/d above the previous month. As highlighted in previous
reports, refiners are maximising output amid strong domestic diesel demand and reported shortages in
some regions. Diesel demand has surged largely as a result of a sharp increase in the use of stand‐alone
generators following power rationing by local governments trying to meet national energy conservation
and emission targets. In its 2006‐2010 Five Year Plan, China had aimed to cut energy consumption per
unit of GDP by 20% compared with 2005, while reducing emissions of key pollutants by 10% in the same
period. Runs are expected to have risen further in November, in part supported by higher domestic retail

prices. China raised official product prices at the end of October, for the first time in seven months.
Gasoline and diesel prices rose by 3% while jet fuel was hiked by 4%, resulting in improved profit margins
for refiners. State‐owned refiners, Sinopec and PetroChina, both announced they were delaying
maintenance and maintaining record runs to meet surging demand.

In Other Asia, runs recovered from their September‐dip following stronger operating rates in India and
Taiwan. Indian crude runs rebounded from September‐lows to average 3.85 mb/d in October, 120 kb/d
lower than a year ago and 240 kb/d up on a month earlier, due to lower maintenance activity. Runs are
expected to dip again in November however, as Reliance reportedly shut half its 660 kb/d domestic
Jamnagar refinery from the end of October to mid‐November.

After averaging only 750 kb/d in September, or around 60% of capacity, Taiwanese crude runs are
expected to have rebounded in October as Formosa likely ramped up runs at its Maillao refinery. The
540 kb/d plant has been running at reduced rates since the end of July, after a fire damaged a residue
desulphurisation unit (RDS) and one of the plant’s three crude distillation units (CDU). While the RDS
remains offline, we expect the 180 kb/d CDU to have been restarted. The company has reported it will
switch some of its crude oil to low‐sulphur types pending the repair of the RDS unit.

Other Asia FSU
mb/d mb/d Crude Throughput
Crude Throughput 6.8
9.2 6.6
9.0
6.4
8.8
6.2
8.6
8.4 6.0
8.2 5.8
8.0 5.6
7.8 5.4
7.6 5.2
Range 05-09 Average 05-09 Range 05-09 Average 05-09
2010 est. 2011 2010 est. 2011

Russian crude throughputs fell by 140 kb/d, or 2.8% in October, due to maintenance and higher crude oil
exports via Transneft. At an average 5.0 mb/d, runs were nevertheless 530 kb/d higher than a year
earlier. Runs were also lower in Kazakhstan, as PetroKazakhstan’s Shymkent plant started a 30‐day
maintenance programme on 15 October. Runs were 220 kb/d, 75 kb/d below September and 30 kb/d
below year‐ago. In the Ukraine, Lukoil announced in October that it has moved forward planned
maintenance at its Odessa refinery, from 1Q2011 to 4Q2010, because of poor market conditions.

OECD Refinery Yields
OECD refinery yields for September increased for most products except gasoline and jet fuel/kerosene.
OECD gross output decreased by almost 800 kb/d compared to August, due to maintenance at both US
refineries and in the Pacific.

OECD September gasoline yields fell 0.19 percentage points (pp) from August as gasoline yields in the
OECD Pacific dropped 1.1 pp to 23 %. This is the first time this year that the OECD Pacific gasoline yields
have been below last year’s level, reflecting high stock levels and lower gasoline crack spreads. Due to
autumn maintenance, gross output of gasoline fell as well, but remained above last year’s level. In OECD
North America, gasoline yields rose 0.2 pp in September continuing their upward trend but at a
somewhat slower pace than before. Also in OECD Europe gasoline yields increased (+0.2 pp) in line with
seasonal patterns, but in the lower half of the five‐year average range.


OECD - Gasoline OECD Pacific - Gasoline

Refinery Yield - Five-year Range Refinery Yield - Five-year Range
36% 25%
24%
35% 23%
22%
34%
21%
33% 20%
19%
32% 18%
2009 2010
2009 2010

Gasoil/diesel yields in the OECD continued the up trend evident since the spring, and reached five‐year
highs in September. Although OECD Pacific gasoil/diesel yields fell 0.5 pp, this was offset by increased
yields in both OECD North America and Europe.

OECD - Gasoil / Diesel OECD N. America - Gasoil / Diesel

Refinery Yield - Five-year Range Refinery Yield - Five-year Range
32%
27%
31% 26%
25%
30%
24%
29% 23%
22%
28%
Jan Apr Jul Oct Jan
Jan Apr Jul Oct Jan
2009 2010 2009 2010

After trending sideways over the summer, OECD naphtha yields rose 0.4 pp in September, in line with
the 5‐year average. The yields were lifted by a 1.0 pp increase in OECD Europe, where demand from
petrochemical producers was high. OECD fuel oil yields were also slightly higher in September, lifted by
higher yields in the North American and Pacific regions.

T ABLES I NTERNATIONAL E NERGY A GENCY ‐ O IL M ARKET R EPORT
TABLES Table 1
WORLD OIL SUPPLY AND DEMAND
Table 1 - World Oil Supply and Demand
2007 2008 1Q09 2Q09 3Q09 4Q09 2009 1Q10 2Q10 3Q10 4Q10 2010 1Q11 2Q11 3Q11 4Q11 2011
OECD DEMAND
North America 25.5 24.2 23.4 22.9 23.3 23.6 23.3 23.6 23.8 24.2 23.8 23.9 23.7 23.7 24.1 24.0 23.9
Europe 15.5 15.4 14.9 14.3 14.5 14.4 14.5 14.2 14.1 14.8 14.4 14.4 14.1 14.0 14.6 14.3 14.3
Pacific 8.4 8.0 8.1 7.3 7.2 8.0 7.7 8.2 7.3 7.6 7.8 7.7 8.1 7.2 7.3 7.7 7.6
Total OECD 49.3 47.6 46.4 44.5 45.0 45.9 45.4 45.9 45.2 46.6 46.0 45.9 45.9 44.9 46.0 46.0 45.7
NON-OECD DEMAND
FSU 4.1 4.2 4.0 3.9 4.1 4.0 4.0 4.2 4.1 4.4 4.2 4.2 4.3 4.2 4.5 4.4 4.4
Europe 0.8 0.8 0.7 0.8 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7
China 7.6 7.7 7.5 8.5 8.7 8.8 8.4 8.9 9.4 9.2 9.5 9.2 9.5 9.8 9.7 9.8 9.7
Other Asia 9.5 9.6 9.9 10.1 9.8 10.1 10.0 10.2 10.4 10.0 10.4 10.3 10.5 10.7 10.3 10.7 10.6
Latin America 5.7 6.0 5.8 6.0 6.1 6.1 6.0 6.1 6.3 6.4 6.4 6.3 6.3 6.5 6.7 6.6 6.5
Middle East 6.6 7.0 6.8 7.3 7.7 7.1 7.2 7.1 7.5 8.0 7.3 7.5 7.5 7.9 8.3 7.7 7.9
Africa 3.1 3.2 3.3 3.2 3.2 3.1 3.2 3.2 3.3 3.2 3.2 3.2 3.3 3.4 3.3 3.3 3.3
Total Non-OECD 37.3 38.6 38.0 39.7 40.4 40.0 39.5 40.4 41.7 42.0 41.8 41.5 42.1 43.3 43.6 43.3 43.1
1
Total Demand 86.7 86.1 84.4 84.2 85.4 85.9 85.0 86.4 87.0 88.6 87.8 87.4 88.0 88.2 89.6 89.3 88.8
OECD SUPPLY
North America4 13.9 13.3 13.5 13.5 13.7 13.8 13.6 13.9 14.0 14.1 14.2 14.1 14.0 13.7 13.7 14.0 13.9
Europe 5.0 4.8 4.9 4.5 4.2 4.5 4.5 4.5 4.2 3.7 4.1 4.1 4.3 4.0 3.9 4.1 4.1
Pacific 0.6 0.6 0.7 0.6 0.7 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.7 0.7 0.7
Total OECD 19.5 18.7 19.0 18.6 18.6 18.9 18.8 19.1 18.8 18.4 19.0 18.8 18.9 18.4 18.3 18.8 18.6
NON-OECD SUPPLY
FSU 12.8 12.8 13.0 13.3 13.4 13.5 13.3 13.5 13.5 13.5 13.8 13.6 13.8 13.8 13.6 13.8 13.8
Europe 0.2 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
China 3.7 3.8 3.8 3.9 3.9 3.9 3.9 4.0 4.1 4.1 4.2 4.1 4.2 4.2 4.2 4.2 4.2
2
Other Asia 3.6 3.6 3.6 3.6 3.6 3.6 3.6 3.7 3.6 3.7 3.6 3.7 3.7 3.6 3.6 3.6 3.6
Latin America2,4 3.6 3.7 3.8 3.9 3.9 4.0 3.9 4.0 4.1 4.1 4.1 4.1 4.2 4.3 4.4 4.5 4.4
Middle East 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7
Africa2 2.6 2.7 2.6 2.6 2.6 2.6 2.6 2.6 2.6 2.6 2.6 2.6 2.6 2.6 2.7 2.7 2.6
Total Non-OECD 28.2 28.4 28.7 29.0 29.2 29.4 29.1 29.6 29.7 29.9 30.1 29.8 30.4 30.4 30.4 30.6 30.4
Processing Gains3 2.2 2.2 2.2 2.2 2.3 2.3 2.3 2.3 2.3 2.3 2.3 2.3 2.3 2.3 2.4 2.4 2.3
Global Biofuels4 1.1 1.4 1.1 1.6 1.8 1.7 1.6 1.4 1.9 2.1 1.8 1.8 1.6 2.0 2.4 2.1 2.0
Total Non-OPEC2 50.9 50.8 51.1 51.4 51.9 52.3 51.7 52.4 52.8 52.8 53.2 52.8 53.2 53.1 53.5 53.9 53.4
Non-OPEC: Historical Composition2 50.4 49.8 51.1 51.4 51.9 52.3 51.7 52.4 52.8 52.8 53.2 52.8 53.2 53.1 53.5 53.9 53.4
OPEC
Crude5 30.3 31.2 28.6 28.5 28.8 28.9 28.7 29.1 29.0 29.2
NGLs 4.3 4.4 4.7 4.7 4.9 5.0 4.8 5.1 5.2 5.4 5.5 5.3 5.7 5.8 5.9 6.0 5.8
Total OPEC2 34.6 35.6 33.3 33.2 33.7 33.9 33.5 34.2 34.2 34.6
OPEC: Historical Composition2 35.1 36.6 33.3 33.2 33.7 33.9 33.5 34.2 34.2 34.6
Total Supply6 85.5 86.4 84.4 84.6 85.6 86.3 85.2 86.5 87.0 87.4
STOCK CHANGES AND MISCELLANEOUS

Reported OECD
Industry -0.3 0.3 0.6 0.1 0.2 -1.2 -0.1 0.2 0.9 -0.2
Government 0.1 0.0 0.2 0.2 0.0 0.0 0.1 0.0 0.0 -0.2
Total -0.2 0.3 0.8 0.2 0.2 -1.2 0.0 0.2 0.9 -0.3
Floating Storage/Oil in Transit 0.0 0.0 0.6 0.2 0.0 0.5 0.3 -0.2 0.0 -0.2
Miscellaneous to balance7 -1.0 -0.1 -1.5 0.0 -0.1 1.1 -0.1 0.2 -0.9 -0.7
Total Stock Ch. & Misc -1.2 0.3 -0.1 0.5 0.2 0.3 0.2 0.2 0.0 -1.3
Memo items:
Call on OPEC crude + Stock ch.8 31.5 30.9 28.7 28.0 28.6 28.6 28.5 28.9 29.0 30.5 29.1 29.4 29.1 29.3 30.2 29.4 29.5
Adjusted Call on OPEC + Stock ch.9 30.5 30.9 27.2 28.1 28.5 29.7 28.4 29.1 28.1 29.8 28.9 29.0 28.9 29.1 30.0 29.3 29.3
1 Measured as deliveries from refineries and primary stocks, comprises inland deliveries, international marine bunkers, refinery fuel, crude for direct burning,
oil from non-conventional sources and other sources of supply.
2 Other Asia includes Indonesia throughout. Latin America excludes Ecuador throughout. Africa excludes Angola throughout.
Total Non-OPEC excludes all countries that were members of OPEC at 1 January 2009. Non-OPEC Historical Composition excludes countries that were OPEC members at that point in time.
Total OPEC comprises all countries which were OPEC members at 1 January 2009. OPEC Historical Composition comprises countries which were OPEC members at that point in time.
3 Net volumetric gains and losses in the refining process (excludes net gain/loss in China and non-OECD Europe) and marine transportation losses.
4 As of the July 2010 OMR, Global Biofuels comprise all world biofuel production including fuel ethanol from the US and Brazil.
5 As of the March 2006 OMR, Venezuelan Orinoco heavy crude production is included within Venezuelan crude estimates. Orimulsion fuel remains within the OPEC NGL and
non-conventional category, but Orimulsion production reportedly ceased from January 2007.
6 Comprises crude oil, condensates, NGLs, oil from non-conventional sources and other sources of supply.
7 Includes changes in non-reported stocks in OECD and non-OECD areas.
8 Equals the arithmetic difference between total demand minus total non-OPEC supply minus OPEC NGLs.
9 Equals the "Call on OPEC + Stock Ch." with "Miscellaneous to balance" added for historical periods and with an average of "Miscellaneous to balance" for the most recent 8 quarters added for forecast periods.

I NTERNATIONAL E NERGY A GENCY ‐ O IL M ARKET R EPORT T ABLES
Table 1A
Table 1a - WORLD
World Oil
OIL Supply
SUPPLY and
AND Demand: ChangesFROM
DEMAND: CHANGES fromLAST
LastMONTH'S
Month’sTABLE
Table11
2007 2008 1Q09 2Q09 3Q09 4Q09 2009 1Q10 2Q10 3Q10 4Q10 2010 1Q11 2Q11 3Q11 4Q11 2011
OECD DEMAND
North America - - - - - - - - - 0.1 0.1 0.1 0.1 - - 0.3 0.1
Europe - - - - - - - - - 0.1 - - - - 0.2 - 0.1
Pacific - - - - - - - - - - - - - - - - -
Total OECD - - - - - - - - - 0.1 0.1 0.1 0.1 - 0.2 0.3 0.1
NON-OECD DEMAND
FSU - - - - - - - - - - - - - - - - -
Europe - - - - - - - - - - - - - - - - -
China - - - - - - - - - - 0.3 0.1 0.1 0.1 0.1 0.3 0.1
Other Asia - - - - - - - - - - - - - - - - -
Latin America - - - - - - - - - - - - - - - - -
Middle East - - - - - - - - - - - - - - - - -
Africa - - - - - - - - - - - - - - - - -
Total Non-OECD - - - - - - - - - 0.1 0.2 0.1 - - 0.1 0.3 0.1
Total Demand - - - - - - - - - 0.2 0.3 0.1 0.1 0.1 0.4 0.5 0.3
OECD SUPPLY
North America - - - - - - - - - - 0.2 0.1 - -0.2 -0.2 - -0.1
Europe - - - - - - - - - - - - - 0.1 0.1 - 0.1
Pacific - - - - - - - - - - - - - - - - -
Total OECD - - - - - - - - - - 0.2 - - -0.2 -0.1 - -0.1
NON-OECD SUPPLY
FSU - - - - - - - - - 0.1 - - - - - - -
Europe - - - - - - - - - - - - - - - - -
China - - - - - - - - - - - - - - - - -
Other Asia - - - - - - - - - - - - - - - - -
Latin America - - - - - - - - - - -0.1 - - - - - -
Middle East - - - - - - - - - - - - - - - - -
Africa - - - - - - - - - 0.1 0.1 - - 0.1 0.1 0.1 0.1
Total Non-OECD - - - - - - - - - 0.1 -0.1 - - - - - -
Processing Gains - - - - - - - 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Global Biofuels - - - - - - - - - - - - - - - - -
Total Non-OPEC - - - - - - - 0.1 0.1 0.2 0.2 0.2 0.1 - - 0.1 0.1
Non-OPEC: historical composition - - -0.1 - - - - 0.1 0.1 0.2 0.2 0.2 0.1 - - 0.1 0.1
OPEC
Crude - - - - - - - - - -
NGLs - - 0.1 0.2 0.2 0.2 0.2 0.1 0.2 0.2 0.2 0.2 - - 0.1 0.1 0.1
Total OPEC - - 0.1 0.2 0.2 0.2 0.2 0.1 0.2 0.2
OPEC: historical composition - - 0.1 0.2 0.2 0.2 0.2 0.1 0.2 0.2
Total Supply - - - 0.1 0.2 0.2 0.1 0.3 0.3 0.4
STOCK CHANGES AND MISCELLANEOUS

REPORTED OECD
Industry - - - - - - - - - -0.1
Government - - - - - - - - - -0.1
Total - - - - - - - - - -0.1
Floating Storage/Oil in Transit - - - - - - - - - -
Miscellaneous to balance - - - 0.1 0.2 0.2 0.1 0.3 0.3 0.4
Total Stock Ch. & Misc - - - 0.1 0.2 0.2 0.1 0.3 0.3 0.2
Memo items:
Call on OPEC crude + Stock ch. - - - -0.1 -0.2 -0.2 -0.1 -0.3 -0.3 -0.2 -0.1 -0.2 - - 0.2 0.3 0.1
Adjusted Call on OPEC + Stock ch. - - - - - - - - - 0.1 0.1 0.1 0.2 0.2 0.4 0.5 0.3
When submitting their monthly oil statistics, OECD Member countries periodically update data for prior periods. Similar updates to non-OECD data can occur.


Table 2
Table 2 - Summary of Global Oil Demand
SUMMARY OF GLOBAL OIL DEMAND
2008 1Q09 2Q09 3Q09 4Q09 2009 1Q10 2Q10 3Q10 4Q10 2010 1Q11 2Q11 3Q11 4Q11 2011
Demand (mb/d)
North America 24.18 23.43 22.94 23.28 23.55 23.30 23.58 23.78 24.22 23.83 23.85 23.67 23.68 24.13 24.00 23.87
Europe 15.36 14.89 14.27 14.47 14.35 14.49 14.17 14.13 14.81 14.38 14.37 14.14 14.02 14.60 14.33 14.28
Pacific 8.04 8.12 7.27 7.25 7.99 7.66 8.19 7.32 7.60 7.79 7.72 8.08 7.20 7.31 7.69 7.57
Total OECD 47.58 46.44 44.48 44.99 45.89 45.45 45.94 45.22 46.62 45.99 45.95 45.89 44.91 46.05 46.02 45.72
Asia 17.37 17.44 18.57 18.54 18.92 18.37 19.17 19.77 19.25 19.89 19.52 19.99 20.47 20.00 20.57 20.26
Middle East 7.01 6.77 7.28 7.74 7.10 7.23 7.15 7.55 7.97 7.32 7.50 7.48 7.93 8.34 7.65 7.85
Latin America 6.00 5.80 5.99 6.09 6.13 6.00 6.05 6.30 6.44 6.40 6.30 6.28 6.52 6.66 6.61 6.52
FSU 4.23 3.98 3.87 4.11 4.04 4.00 4.19 4.14 4.41 4.24 4.24 4.30 4.22 4.51 4.38 4.35
Africa 3.19 3.25 3.23 3.17 3.11 3.19 3.18 3.28 3.24 3.23 3.23 3.32 3.39 3.34 3.33 3.35
Europe 0.76 0.75 0.75 0.73 0.72 0.74 0.70 0.71 0.71 0.71 0.71 0.72 0.72 0.73 0.72 0.72
Total Non-OECD 38.55 37.99 39.69 40.39 40.02 39.53 40.44 41.74 42.03 41.77 41.50 42.10 43.26 43.58 43.26 43.05
World 86.13 84.43 84.17 85.38 85.91 84.98 86.38 86.96 88.65 87.77 87.45 87.99 88.16 89.63 89.28 88.77
of which: US50 19.50 18.86 18.57 18.72 18.93 18.77 18.93 19.10 19.57 19.14 19.19 18.99 19.02 19.47 19.29 19.19
Europe 5* 9.43 9.32 8.77 8.84 8.79 8.93 8.78 8.67 9.07 8.72 8.81 8.76 8.58 8.88 8.67 8.72
China 7.75 7.51 8.47 8.70 8.78 8.37 8.93 9.36 9.23 9.47 9.25 9.47 9.80 9.67 9.84 9.70
Japan 4.79 4.73 4.04 4.11 4.60 4.37 4.79 4.04 4.33 4.37 4.38 4.65 3.90 4.05 4.27 4.22
India 3.09 3.36 3.30 3.09 3.30 3.26 3.39 3.45 3.14 3.39 3.34 3.53 3.54 3.21 3.49 3.44
Russia 3.00 2.76 2.71 2.93 2.84 2.81 2.94 2.95 3.22 3.00 3.03 3.02 2.99 3.28 3.11 3.10
Brazil 2.53 2.43 2.53 2.62 2.68 2.57 2.59 2.70 2.79 2.81 2.72 2.72 2.81 2.89 2.93 2.84
Saudi Arabia 2.27 2.10 2.65 2.87 2.36 2.49 2.36 2.75 3.05 2.49 2.66 2.49 2.91 3.20 2.63 2.81
Canada 2.24 2.20 2.08 2.16 2.17 2.15 2.19 2.23 2.24 2.25 2.23 2.21 2.19 2.23 2.23 2.22
Korea 2.14 2.31 2.14 2.03 2.26 2.18 2.31 2.18 2.15 2.27 2.23 2.31 2.18 2.13 2.26 2.22
Mexico 2.15 2.06 2.02 2.11 2.15 2.08 2.14 2.17 2.12 2.13 2.14 2.16 2.18 2.14 2.17 2.16
Iran 1.94 1.86 1.82 1.81 1.84 1.83 1.82 1.81 1.81 1.82 1.81 1.93 1.87 1.89 1.86 1.89
Total 60.83 59.49 59.07 59.99 60.70 59.82 61.18 61.40 62.72 61.86 61.79 62.24 61.99 63.05 62.75 62.51
% of World 70.6% 70.5% 70.2% 70.3% 70.7% 70.4% 70.8% 70.6% 70.8% 70.5% 70.7% 70.7% 70.3% 70.3% 70.3% 70.4%
Annual Change (% per annum)
North America -5.2 -5.4 -6.1 -1.3 -1.6 -3.6 0.6 3.6 4.1 1.2 2.4 0.4 -0.4 -0.4 0.7 0.1
Europe -0.6 -2.9 -5.7 -7.1 -6.7 -5.6 -4.9 -1.0 2.3 0.2 -0.8 -0.2 -0.8 -1.4 -0.3 -0.7
Pacific -4.0 -8.5 -7.2 -3.5 0.5 -4.8 0.9 0.6 4.8 -2.4 0.9 -1.3 -1.5 -3.8 -1.3 -2.0
Total OECD -3.6 -5.2 -6.1 -3.6 -2.9 -4.5 -1.1 1.7 3.6 0.2 1.1 -0.1 -0.7 -1.2 0.1 -0.5
Asia 1.7 -0.8 4.8 6.7 12.5 5.8 9.9 6.5 3.8 5.1 6.3 4.3 3.6 3.9 3.4 3.8
Middle East 5.7 1.6 3.2 3.7 3.8 3.1 5.6 3.7 3.0 3.0 3.8 4.7 5.0 4.6 4.6 4.7
Latin America 5.6 0.0 -1.1 -0.6 2.2 0.1 4.4 5.2 5.7 4.3 4.9 3.8 3.6 3.4 3.3 3.5
FSU 2.6 -5.0 -6.7 -6.2 -3.8 -5.4 5.2 7.0 7.3 5.0 6.1 2.7 2.0 2.1 3.3 2.5
Africa 3.9 1.5 1.0 0.9 -3.4 0.0 -2.2 1.6 2.0 3.7 1.3 4.3 3.3 3.3 3.1 3.5
Europe -0.4 -4.3 -0.9 -0.7 -6.5 -3.2 -6.4 -6.4 -2.7 -0.8 -4.1 2.2 2.7 2.2 1.6 2.2
Total Non-OECD 3.3 -0.6 1.9 3.0 5.8 2.5 6.5 5.2 4.0 4.4 5.0 4.1 3.6 3.7 3.6 3.7
World -0.6 -3.2 -2.5 -0.6 0.9 -1.3 2.3 3.3 3.8 2.2 2.9 1.9 1.4 1.1 1.7 1.5
Annual Change (mb/d)
North America -1.33 -1.35 -1.49 -0.30 -0.39 -0.88 0.15 0.83 0.94 0.27 0.55 0.09 -0.10 -0.08 0.17 0.02
Europe -0.10 -0.45 -0.86 -1.11 -1.03 -0.86 -0.72 -0.14 0.34 0.02 -0.12 -0.03 -0.11 -0.20 -0.05 -0.10
Pacific -0.34 -0.76 -0.56 -0.26 0.04 -0.39 0.07 0.04 0.35 -0.20 0.07 -0.11 -0.11 -0.29 -0.10 -0.15
Total OECD -1.77 -2.56 -2.91 -1.68 -1.38 -2.13 -0.50 0.74 1.63 0.10 0.50 -0.05 -0.31 -0.57 0.03 -0.23
Asia 0.29 -0.14 0.85 1.17 2.11 1.00 1.73 1.20 0.71 0.97 1.15 0.82 0.70 0.75 0.68 0.74
Middle East 0.38 0.11 0.23 0.28 0.26 0.22 0.38 0.27 0.23 0.21 0.27 0.34 0.38 0.37 0.33 0.35
Latin America 0.32 0.00 -0.07 -0.04 0.13 0.01 0.25 0.31 0.35 0.26 0.29 0.23 0.23 0.22 0.21 0.22
FSU 0.11 -0.21 -0.28 -0.27 -0.16 -0.23 0.21 0.27 0.30 0.20 0.25 0.11 0.08 0.09 0.14 0.11
Africa 0.12 0.05 0.03 0.03 -0.11 0.00 -0.07 0.05 0.06 0.11 0.04 0.14 0.11 0.11 0.10 0.11
Europe 0.00 -0.03 -0.01 -0.01 -0.05 -0.02 -0.05 -0.05 -0.02 -0.01 -0.03 0.02 0.02 0.02 0.01 0.02
Total Non-OECD 1.22 -0.23 0.76 1.16 2.18 0.98 2.45 2.05 1.64 1.76 1.97 1.65 1.52 1.56 1.48 1.55
World -0.55 -2.78 -2.16 -0.52 0.80 -1.15 1.95 2.79 3.27 1.86 2.47 1.61 1.21 0.98 1.51 1.32
Revisions to Oil Demand from Last Month's Report (mb/d)
North America 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.08 0.14 0.06 0.07 0.02 0.04 0.27 0.10
Europe 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.06 -0.03 0.01 0.00 0.03 0.17 0.01 0.05
Pacific 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -0.01 -0.04 -0.01 -0.01 0.00 0.03 -0.03 0.00
Total OECD 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.14 0.08 0.06 0.06 0.05 0.23 0.25 0.15
Asia 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.25 0.06 0.05 0.07 0.05 0.30 0.12
Middle East 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -0.03 -0.01 0.00 -0.01 0.03 -0.03 0.00
Latin America 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.03 0.00 0.01 0.00 -0.01 0.02 -0.01 0.00
FSU 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -0.01 0.02 0.00 -0.01 -0.01 -0.01 0.03 0.00
Africa 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.02 -0.01 0.00 -0.01 -0.01 0.02 -0.01 0.00
Europe 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.01 0.00 0.00 0.00 0.00 0.01 0.00 0.00
Total Non-OECD 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.05 0.23 0.07 0.03 0.02 0.12 0.28 0.11
World 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.19 0.31 0.13 0.08 0.07 0.36 0.53 0.26
Revisions to Oil Demand Growth from Last Month's Report (mb/d)
World 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.19 0.31 0.13 0.08 0.07 0.16 0.22 0.13
* France, Germany, Italy, Spain and UK

Table 2a
Table 2a - OECD Regional Oil Demand
OECD REGIONAL OIL DEMAND1
Latest month vs.

2
2008 2009 4Q09 1Q10 2Q10 3Q10 Jul 10 Aug 10 Sep 10 Aug 10 Sep 09
North America
LPG&Ethane 2.70 2.79 3.17 3.18 2.53 2.68 2.60 2.67 2.76 0.09 0.12
Naphtha 0.36 0.33 0.32 0.40 0.42 0.42 0.44 0.42 0.40 -0.02 0.08
Motor Gasoline 10.54 10.56 10.52 10.22 10.81 10.91 10.97 11.01 10.73 -0.28 0.25
Jet/Kerosene 1.77 1.62 1.57 1.62 1.66 1.70 1.70 1.74 1.65 -0.09 0.05
Gasoil/Diesel Oil 5.00 4.61 4.72 4.80 4.70 4.76 4.55 4.83 4.90 0.07 0.38
Residual Fuel Oil 1.07 0.93 0.93 0.99 0.96 0.94 0.98 0.90 0.96 0.06 0.15
Other Products 2.73 2.46 2.31 2.36 2.70 2.81 2.72 2.95 2.78 -0.17 0.06
Total 24.18 23.30 23.55 23.58 23.78 24.22 23.96 24.52 24.18 -0.34 1.08
Europe
LPG&Ethane 1.02 0.92 0.89 0.98 0.94 0.85 0.85 0.87 0.84 -0.03 -0.01
Naphtha 1.16 1.11 1.15 1.27 1.15 1.21 1.23 1.19 1.21 0.02 0.06
Motor Gasoline 2.36 2.29 2.20 2.06 2.27 2.33 2.38 2.31 2.31 0.01 -0.07
Jet/Kerosene 1.32 1.27 1.24 1.20 1.24 1.37 1.39 1.36 1.37 0.01 0.01
Residual Fuel Oil 1.66 1.43 1.40 1.33 1.21 1.29 1.29 1.26 1.34 0.07 -0.09
Other Products 1.57 1.45 1.38 1.21 1.44 1.58 1.57 1.52 1.64 0.12 0.00
Total 15.36 14.49 14.35 14.17 14.13 14.81 14.81 14.36 15.26 0.90 0.28
Pacific
LPG&Ethane 0.88 0.86 0.87 0.90 0.83 0.79 0.72 0.81 0.84 0.03 -0.03
Naphtha 1.60 1.63 1.71 1.76 1.60 1.65 1.58 1.68 1.68 0.00 0.01
Motor Gasoline 1.53 1.55 1.57 1.52 1.52 1.66 1.65 1.72 1.60 -0.12 0.06
Jet/Kerosene 0.89 0.85 0.99 1.15 0.71 0.65 0.61 0.64 0.70 0.05 0.07
Other Products 0.54 0.42 0.45 0.45 0.42 0.56 0.52 0.57 0.59 0.02 0.11
Total 8.04 7.66 7.99 8.19 7.32 7.60 7.38 7.70 7.72 0.02 0.42
OECD
LPG&Ethane 4.60 4.58 4.93 5.05 4.30 4.32 4.17 4.35 4.44 0.09 0.08
Naphtha 3.12 3.06 3.18 3.43 3.16 3.28 3.25 3.29 3.29 0.00 0.15
Motor Gasoline 14.43 14.39 14.30 13.79 14.60 14.90 15.00 15.04 14.65 -0.39 0.24
Jet/Kerosene 3.98 3.73 3.80 3.98 3.62 3.72 3.70 3.74 3.72 -0.03 0.14
Other Products 4.85 4.33 4.14 4.02 4.56 4.95 4.80 5.04 5.01 -0.03 0.17
Total 47.58 45.45 45.89 45.94 45.22 46.62 46.15 46.58 47.16 0.58 1.78
1 Demand, measured as deliveries from refineries and primary stocks, comprises inland deliveries, international bunkers and refinery fuel. It includes crude for direct burning, oil from
non-conventional sources and other sources of supply. Jet/kerosene comprises jet kerosene and non-aviation kerosene. Gasoil comprises diesel, light heating oil and other gasoils.
North America comprises US 50 states, US territories, Mexico and Canada.
2 Latest official OECD submissions (MOS).


Table 2b
Table 2b - OECD Oil Demand and % Growth in Demand in Selected
1
OECD Countries
OIL DEMAND IN SELECTED OECD COUNTRIES
Latest month vs.

2
2008 2009 4Q09 1Q10 2Q10 3Q10 Jul 10 Aug 10 Sep 10 Aug 10 Sep 09
3
United States
LPG 1.95 2.05 2.41 2.39 1.80 2.00 1.95 2.00 2.06 0.06 0.13
Naphtha 0.25 0.25 0.25 0.27 0.28 0.28 0.31 0.28 0.25 -0.04 -0.02
Motor Gasoline 8.99 9.00 8.94 8.68 9.22 9.31 9.36 9.40 9.17 -0.23 0.26
Jet/Kerosene 1.55 1.41 1.39 1.42 1.46 1.48 1.48 1.51 1.46 -0.05 0.05
Gasoil 3.95 3.63 3.70 3.79 3.70 3.76 3.56 3.81 3.90 0.09 0.34
Other Products 2.19 1.92 1.73 1.80 2.11 2.19 2.12 2.31 2.15 -0.16 -0.04
Total 19.50 18.77 18.93 18.93 19.10 19.57 19.36 19.80 19.55 -0.25 0.96
Japan
LPG 0.53 0.49 0.51 0.53 0.46 0.43 0.40 0.43 0.45 0.02 -0.05
Naphtha 0.75 0.73 0.80 0.84 0.71 0.74 0.70 0.77 0.74 -0.02 -0.06
Motor Gasoline 0.98 0.99 1.00 0.96 0.97 1.08 1.07 1.13 1.04 -0.09 0.06
Jet/Kerosene 0.59 0.55 0.64 0.81 0.43 0.36 0.34 0.35 0.40 0.05 0.04
Diesel 0.48 0.40 0.43 0.38 0.35 0.38 0.37 0.37 0.40 0.04 0.02
Other Gasoil 0.44 0.44 0.46 0.53 0.43 0.42 0.42 0.41 0.44 0.03 0.05
Other Products 0.49 0.37 0.38 0.34 0.33 0.50 0.44 0.51 0.53 0.02 0.11
Total 4.79 4.37 4.60 4.79 4.04 4.33 4.17 4.39 4.44 0.05 0.29
Germany
LPG 0.09 0.09 0.09 0.10 0.10 0.10 0.10 0.11 0.10 -0.01 0.01
Naphtha 0.38 0.37 0.38 0.43 0.37 0.41 0.42 0.41 0.39 -0.02 0.00
Motor Gasoline 0.48 0.47 0.47 0.42 0.48 0.49 0.49 0.47 0.49 0.02 -0.01
Jet/Kerosene 0.19 0.19 0.19 0.17 0.19 0.20 0.21 0.20 0.20 0.00 0.01
Diesel 0.65 0.64 0.66 0.60 0.68 0.71 0.71 0.68 0.75 0.06 0.02
Other Gasoil 0.48 0.41 0.36 0.46 0.33 0.45 0.37 0.44 0.55 0.11 0.17
Other Products 0.14 0.11 0.11 0.05 0.11 0.12 0.13 0.10 0.13 0.03 0.01
Total 2.57 2.44 2.39 2.38 2.39 2.63 2.58 2.56 2.76 0.20 0.21
Italy
LPG 0.10 0.10 0.12 0.14 0.10 0.09 0.09 0.09 0.10 0.01 0.01
Naphtha 0.10 0.09 0.09 0.11 0.12 0.12 0.12 0.12 0.11 0.00 0.03
Motor Gasoline 0.26 0.25 0.24 0.22 0.24 0.25 0.26 0.24 0.24 0.00 -0.01
Jet/Kerosene 0.09 0.09 0.09 0.09 0.11 0.12 0.12 0.12 0.12 -0.01 0.02
Diesel 0.51 0.49 0.50 0.47 0.50 0.51 0.55 0.44 0.53 0.09 0.00
Other Gasoil 0.13 0.13 0.16 0.13 0.10 0.11 0.11 0.10 0.13 0.03 0.00
Other Products 0.19 0.16 0.14 0.13 0.16 0.21 0.20 0.21 0.21 0.00 0.02
Total 1.63 1.53 1.54 1.45 1.47 1.55 1.62 1.47 1.58 0.12 0.00
France
LPG 0.13 0.09 0.09 0.14 0.09 0.09 0.08 0.09 0.10 0.01 0.02
Naphtha 0.17 0.14 0.14 0.15 0.15 0.13 0.13 0.14 0.13 -0.01 -0.04
Motor Gasoline 0.21 0.20 0.19 0.17 0.20 0.20 0.21 0.20 0.20 0.00 -0.01
Jet/Kerosene 0.16 0.15 0.14 0.14 0.15 0.16 0.17 0.16 0.16 0.00 0.02
Diesel 0.66 0.66 0.68 0.64 0.69 0.70 0.73 0.65 0.72 0.06 0.02
Other Gasoil 0.33 0.31 0.33 0.35 0.21 0.26 0.22 0.23 0.33 0.10 0.03
Other Products 0.19 0.18 0.15 0.16 0.19 0.19 0.19 0.18 0.21 0.03 0.02
Total 1.95 1.83 1.82 1.85 1.77 1.82 1.81 1.72 1.93 0.20 0.04
United Kingdom
LPG 0.17 0.16 0.14 0.13 0.15 0.11 0.11 0.11 0.11 0.00 -0.01
Naphtha 0.02 0.02 0.03 0.03 0.02 0.02 0.02 0.02 0.02 0.00 -0.01
Motor Gasoline 0.39 0.37 0.35 0.35 0.36 0.35 0.35 0.35 0.36 0.01 -0.01
Jet/Kerosene 0.34 0.34 0.34 0.35 0.30 0.33 0.32 0.33 0.34 0.01 -0.02
Diesel 0.44 0.45 0.44 0.47 0.46 0.47 0.47 0.47 0.47 0.01 0.05
Other Gasoil 0.14 0.10 0.09 0.11 0.10 0.13 0.13 0.13 0.12 0.00 -0.01
Other Products 0.15 0.16 0.15 0.14 0.16 0.16 0.15 0.17 0.15 -0.02 -0.02
Total 1.73 1.67 1.61 1.65 1.62 1.63 1.63 1.64 1.64 0.00 -0.04
Canada
LPG 0.34 0.34 0.34 0.35 0.35 0.29 0.27 0.29 0.31 0.02 -0.01
Naphtha 0.08 0.05 0.05 0.08 0.08 0.09 0.08 0.09 0.10 0.00 0.06
Motor Gasoline 0.72 0.73 0.72 0.70 0.75 0.76 0.77 0.77 0.74 -0.03 -0.02
Jet/Kerosene 0.12 0.12 0.10 0.11 0.11 0.12 0.13 0.13 0.11 -0.02 0.00
Diesel 0.23 0.23 0.23 0.23 0.23 0.21 0.21 0.20 0.21 0.01 -0.03
Other Gasoil 0.33 0.28 0.31 0.32 0.29 0.32 0.30 0.34 0.32 -0.02 0.06
Residual Fuel Oil 0.11 0.09 0.09 0.11 0.10 0.09 0.09 0.10 0.09 -0.01 0.00
Other Products 0.32 0.30 0.32 0.30 0.32 0.36 0.35 0.37 0.36 -0.01 0.04
Total 2.24 2.15 2.17 2.19 2.23 2.24 2.20 2.29 2.24 -0.05 0.10
1 Demand, measured as deliveries from refineries and primary stocks, comprises inland deliveries, international bunkers and refinery fuel. It includes crude for direct burning, oil from
non-conventional sources and other sources of supply. Jet/kerosene comprises jet kerosene and non-aviation kerosene. Gasoil comprises diesel, light heating oil and other gasoils.
2 Latest official OECD submissions (MOS).
3 US figures exclude US territories.


Table 3
Table 3 - World Oil Production WORLD OIL PRODUCTION
2009 2010 2011 2Q10 3Q10 4Q10 1Q11 2Q11 Sep 10 Oct 10 Nov 10
OPEC
Crude Oil
Saudi Arabia 7.92 7.96 8.04 8.01 7.97 8.07
Iran 3.74 3.75 3.69 3.68 3.70 3.72
Iraq 2.43 2.35 2.41 2.52 2.44 2.48
UAE 2.27 2.30 2.33 2.31 2.33 2.32
Kuwait 2.01 2.03 2.03 2.03 2.03 2.02
Neutral Zone 0.54 0.54 0.54 0.54 0.54 0.54
Qatar 0.80 0.79 0.80 0.80 0.80 0.82
Angola 1.77 1.81 1.71 1.65 1.68 1.66
Nigeria 1.82 1.96 2.15 2.15 2.20 2.12
Libya 1.55 1.56 1.56 1.55 1.56 1.56
Algeria 1.25 1.24 1.26 1.27 1.27 1.27
Ecuador 0.47 0.46 0.46 0.46 0.47 0.47
Venezuela 2.15 2.24 2.23 2.23 2.21 2.19
Total Crude Oil6 28.71 28.99 29.21 29.20 29.19 29.24
Total NGLs1,6 4.81 5.29 5.84 5.19 5.37 5.48 5.70 5.79 5.37 5.48 5.48
6
Total OPEC 33.52 34.18 34.58 34.56 34.67 34.71
OPEC: Historical Composition6 33.52 34.18 34.58 34.56 34.67 34.71
2
NON-OPEC
OECD
North America 13.62 14.06 13.88 14.05 14.09 14.18 14.04 13.69 14.10 14.05 14.37
United States5 7.44 7.78 7.71 7.74 7.80 7.91 7.75 7.75 7.92 7.94 7.96
Mexico 2.97 2.96 2.90 2.96 2.94 2.94 2.94 2.92 2.94 2.94 2.94
Canada 3.22 3.32 3.27 3.34 3.35 3.33 3.35 3.02 3.24 3.17 3.46
Europe 4.52 4.14 4.07 4.18 3.74 4.15 4.25 4.02 3.71 4.16 4.08
UK 1.47 1.37 1.31 1.40 1.21 1.33 1.39 1.31 1.31 1.30 1.33
Norway 2.39 2.15 2.15 2.14 1.92 2.19 2.24 2.10 1.80 2.22 2.12
Others 0.67 0.63 0.60 0.63 0.61 0.63 0.62 0.61 0.61 0.63 0.62
Pacific 0.65 0.62 0.67 0.62 0.61 0.64 0.63 0.64 0.59 0.64 0.63
Australia 0.55 0.53 0.57 0.52 0.51 0.54 0.53 0.54 0.50 0.54 0.54
Others 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.09 0.10 0.09
Total OECD 18.80 18.83 18.61 18.84 18.44 18.96 18.93 18.35 18.41 18.84 19.08
NON-OECD
Former USSR 13.28 13.59 13.77 13.53 13.55 13.79 13.83 13.80 13.51 13.75 13.82
Russia 10.21 10.46 10.57 10.43 10.44 10.56 10.56 10.56 10.49 10.58 10.56
Others 3.07 3.13 3.20 3.10 3.11 3.23 3.27 3.25 3.02 3.17 3.27
Asia 7.49 7.75 7.84 7.70 7.84 7.80 7.90 7.81 7.94 7.84 7.82
China 3.89 4.09 4.21 4.06 4.14 4.17 4.24 4.18 4.21 4.21 4.19
Malaysia 0.74 0.71 0.65 0.72 0.70 0.69 0.67 0.66 0.73 0.71 0.68
India 0.80 0.86 0.89 0.84 0.88 0.89 0.89 0.89 0.88 0.90 0.88
Indonesia 0.98 0.98 0.95 1.00 0.98 0.97 0.97 0.96 0.98 0.93 0.99
Others 1.08 1.10 1.13 1.09 1.13 1.09 1.13 1.12 1.14 1.10 1.09
Europe 0.14 0.14 0.14 0.14 0.14 0.14 0.14 0.14 0.15 0.14 0.14
Latin America 3.88 4.07 4.36 4.09 4.08 4.08 4.21 4.33 4.03 3.97 4.11
Brazil5 2.03 2.12 2.31 2.15 2.13 2.13 2.19 2.27 2.08 2.06 2.15
Argentina 0.72 0.71 0.70 0.71 0.70 0.70 0.71 0.70 0.70 0.69 0.71
Colombia 0.67 0.79 0.90 0.78 0.79 0.81 0.85 0.90 0.80 0.80 0.81
Others 0.45 0.45 0.45 0.45 0.45 0.43 0.45 0.45 0.45 0.42 0.44
3
Middle East 1.68 1.69 1.69 1.68 1.68 1.69 1.70 1.69 1.69 1.69 1.69
Oman 0.81 0.87 0.91 0.86 0.87 0.89 0.90 0.90 0.88 0.89 0.89
Syria 0.38 0.37 0.35 0.37 0.37 0.36 0.36 0.35 0.36 0.36 0.36
Yemen 0.29 0.26 0.25 0.27 0.26 0.25 0.26 0.25 0.26 0.26 0.25
Others 0.19 0.19 0.18 0.19 0.19 0.19 0.19 0.18 0.19 0.19 0.19
Africa 2.61 2.60 2.64 2.59 2.60 2.59 2.61 2.63 2.60 2.59 2.59
Egypt 0.75 0.74 0.73 0.74 0.74 0.74 0.74 0.73 0.74 0.74 0.74
Gabon 0.24 0.24 0.25 0.23 0.25 0.25 0.25 0.25 0.25 0.25 0.25
Others 1.63 1.62 1.66 1.62 1.61 1.60 1.62 1.65 1.61 1.60 1.60
Total Non-OECD 29.08 29.83 30.43 29.73 29.89 30.09 30.39 30.39 29.91 29.99 30.17
Processing Gains4 2.25 2.30 2.35 2.29 2.33 2.31 2.33 2.34 2.33 2.31 2.31
Global Biofuels5 1.57 1.82 2.01 1.95 2.14 1.82 1.55 1.99 2.10 1.93 1.85
6
TOTAL NON-OPEC 51.69 52.79 53.41 52.82 52.79 53.19 53.20 53.07 52.73 53.07 53.41
Non-OPEC: Historical Composition6 51.69 52.79 53.41 52.82 52.79 53.19 53.20 53.07 52.73 53.07 53.41
TOTAL SUPPLY 85.21 86.99 87.37 87.30 87.74 88.12
1 Includes condensates reported by OPEC countries, oil from non-conventional sources, e.g. Venezuelan Orimulsion (but not Orinoco extra-heavy oil),
and non-oil inputs to Saudi Arabian MTBE. Orimulsion production reportedly ceased from January 2007.
2 Comprises crude oil, condensates, NGLs and oil from non-conventional sources
3 Includes small amounts of production from Israel, Jordan and Bahrain.
4 Net volumetric gains and losses in refining (excludes net gain/loss in China and non-OECD Europe) and marine transportation losses.
5 As of the July 2010 OMR, Global Biofuels comprise all world biofuel production including fuel ethanol from the US and Brazil.
6 Total OPEC comprises all countries which were OPEC members at 1 January 2009. OPEC Historical Composition comprises countries which were OPEC members at that point in time.
Total Non-OPEC excludes all countries that were OPEC members at 1 January 2009. Non-OPEC Historical Composition excludes countries that were OPEC members at that point in time.


Table 4 - OECD Industry Stocks and Table 4 Stock Changes/OECD Government-
Quarterly
1
Controlled Stocks andINDUSTRY
OECD QuarterlySTOCKS
Stock Changes
AND QUARTERLY STOCK CHANGES
Table 4a - Industry Stocks on Land in Selected Countries
2 2
RECENT MONTHLY STOCKS PRIOR YEARS' STOCKS STOCK CHANGES
in Million Barrels in Million Barrels in mb/d
Jun2010 Jul2010 Aug2010 Sep2010 Oct2010* Oct2007 Oct2008 Oct2009 4Q2009 1Q2010 2Q2010 3Q2010
North America
Crude 509.9 502.9 502.1 503.6 510.1 449.6 464.2 482.2 -0.09 0.40 0.04 -0.07
Motor Gasoline 245.3 251.3 252.1 249.6 241.3 225.8 225.0 240.0 0.11 0.06 -0.15 0.05
Middle Distillate 230.9 243.0 247.5 243.9 233.6 207.0 197.1 245.4 -0.12 -0.26 0.16 0.14
Residual Fuel Oil 50.8 49.5 46.7 48.7 49.5 47.0 47.7 43.1 0.01 0.05 0.02 -0.02
3
Total Products 711.7 735.3 737.7 730.6 708.0 666.5 656.0 724.2 -0.54 -0.25 0.42 0.21
4
Total 1376.9 1394.8 1399.7 1396.1 1381.2 1277.8 1289.2 1370.2 -0.88 0.14 0.61 0.21
Europe
Crude 342.5 335.1 348.0 318.9 334.2 323.4 331.6 323.4 0.03 -0.02 0.13 -0.26
Motor Gasoline 94.9 94.3 94.6 95.2 94.2 94.8 93.0 97.5 0.05 0.03 -0.09 0.00
Middle Distillate 286.0 286.1 288.9 280.1 280.4 235.5 256.0 283.8 -0.03 -0.04 0.03 -0.06
3
Total Products 568.0 563.7 567.0 560.6 557.6 512.1 540.2 558.2 0.04 -0.04 0.00 -0.08
4
Total 979.7 967.1 983.7 945.1 956.0 911.3 945.8 951.8 0.04 0.01 0.08 -0.38
Pacific
Crude 166.3 170.6 161.7 155.9 154.2 174.0 163.1 165.5 -0.06 0.05 0.02 -0.11
Motor Gasoline 26.2 24.4 23.9 23.9 25.1 22.1 23.9 24.9 -0.02 0.02 0.01 -0.03
Residual Fuel Oil 20.9 20.1 20.6 21.9 20.1 21.8 20.7 21.1 -0.03 0.02 0.01 0.01
3
Total Products 168.0 169.2 177.0 177.7 183.3 187.1 194.1 180.1 -0.26 -0.03 0.11 0.11
4
Total 405.1 409.4 409.1 402.8 407.5 431.8 433.2 410.2 -0.39 0.03 0.21 -0.02
Total OECD
Crude 1018.7 1008.6 1011.7 978.5 998.4 947.0 958.9 971.1 -0.12 0.43 0.19 -0.44
Motor Gasoline 366.3 370.0 370.5 368.6 360.6 342.8 341.9 362.3 0.14 0.11 -0.23 0.03
3
Total Products 1447.7 1468.2 1481.6 1469.0 1448.9 1365.7 1390.3 1462.5 -0.76 -0.33 0.53 0.23
4
Total 2761.7 2771.3 2792.4 2744.0 2744.7 2620.9 2668.2 2732.2 -1.23 0.18 0.90 -0.19
OECD GOVERNMENT-CONTROLLED STOCKS5 AND QUARTERLY STOCK CHANGES

2 2
RECENT MONTHLY STOCKS PRIOR YEARS' STOCKS STOCK CHANGES
in Million Barrels in Million Barrels in mb/d
Jun2010 Jul2010 Aug2010 Sep2010 Oct2010* Oct2007 Oct2008 Oct2009 4Q2009 1Q2010 2Q2010 3Q2010
North America
Crude 726.6 726.6 726.6 726.5 726.7 694.1 701.8 725.1 0.02 0.00 0.00 0.00
Products 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 0.00 0.00 0.00 0.00
Europe
Crude 185.4 185.3 182.9 182.0 187.7 180.6 185.5 185.6 -0.02 0.04 -0.03 -0.04
Products 237.3 234.7 235.3 235.4 227.0 234.7 229.5 239.7 -0.01 -0.01 -0.03 -0.02
Pacific
Crude 390.9 388.9 387.0 381.9 381.9 385.0 384.7 388.4 0.01 0.00 0.02 -0.10
Products 20.0 20.0 20.0 20.0 20.0 18.4 19.2 20.0 0.01 0.00 0.00 0.00
Total OECD
Crude 1302.9 1300.7 1296.4 1290.5 1296.3 1259.7 1272.0 1299.1 0.00 0.04 0.00 -0.13
Products 259.3 256.7 257.3 257.4 248.9 255.0 250.6 261.8 0.00 -0.01 -0.03 -0.02
4
Total 1563.5 1558.8 1555.1 1549.3 1546.7 1515.8 1523.6 1562.3 0.00 0.03 -0.04 -0.15
* estimated
1 Stocks are primary national territory stocks on land (excluding utility stocks and including pipeline and entrepot stocks where known) and include stocks held by
industry to meet IEA, EU and national emergency reserve commitments and are subject to government control in emergencies.
2 Closing stock levels.
3 Total products includes gasoline, middle distillates, fuel oil and other products.
4 Total includes NGLs, refinery feedstocks, additives/oxygenates and other hydrocarbons.
5 Includes government-owned stocks and stock holding organisation stocks held for emergency purposes.


Table 5
Table 5 - Total Stocks on Land in OECD Countries/Total OECD Stocks
1
TOTAL STOCKS ON LAND IN OECD COUNTRIES
('millions of barrels' and 'days')
3
End September 2009 End December 2009 End March 2010 End June 2010 End September 2010
2
Stock Days Fwd Stock Days Fwd Stock Days Fwd Stock Days Fwd Stock Days Fwd
Level Demand Level Demand Level Demand Level Demand Level Demand
North America
Canada 194.5 90 192.6 87 195.1 83 188.3 80 194.7 -
Mexico 50.4 23 44.7 21 51.5 24 54.4 26 49.0 -
United States4 1850.3 98 1778.4 95 1781.4 94 1840.7 94 1858.7 -
4
Total 2117.3 90 2037.7 87 2050.1 86 2105.5 87 2124.6 89
Pacific
Australia 44.9 46 40.3 43 41.5 44 42.7 45 41.3 -
Japan 607.3 132 588.8 123 581.5 144 597.1 138 581.8 -
Korea 167.0 74 155.0 67 163.6 75 167.3 78 173.5 -
New Zealand 7.5 49 8.1 51 8.1 59 8.9 57 8.2 -
Total 826.7 104 792.2 97 794.7 109 816.0 107 804.8 103
5
Europe
Austria 20.8 78 21.2 80 22.7 84 20.1 68 19.8 -
Belgium 34.2 52 34.4 53 35.3 69 37.8 64 35.3 -
Czech Republic 21.8 104 21.5 124 21.7 106 20.4 99 21.1 -
Denmark 25.0 153 25.5 154 27.2 171 28.2 160 24.3 -
Finland 29.3 143 33.1 151 32.5 171 28.5 138 28.5 -
France 174.0 96 174.9 94 171.8 97 170.1 93 163.4 -
Germany 276.7 116 284.1 120 287.7 120 281.0 107 283.9 -
Greece 35.5 90 35.1 85 35.6 104 33.9 97 36.3 -
Hungary 14.4 89 14.3 115 16.8 115 17.0 107 15.9 -
Ireland 12.4 71 11.4 66 12.7 74 12.8 77 12.2 -
Italy 129.0 84 125.6 87 129.2 88 132.5 85 126.8 -
Luxembourg 0.8 15 0.8 14 0.8 13 0.7 12 0.7 -
Netherlands 138.1 137 135.7 135 131.0 123 138.8 135 120.9 -
Norway 24.7 128 21.9 112 21.1 93 22.1 112 20.8 -
Poland 64.0 115 63.2 125 62.5 115 63.8 106 64.2 -
Portugal 24.5 92 26.2 99 23.4 85 24.9 88 22.8 -
Slovak Republic 8.3 103 8.3 109 9.5 122 9.3 99 8.6 -
Spain 135.0 94 132.6 91 132.0 93 134.1 94 133.0 -
Sweden 38.5 117 39.5 110 39.3 109 35.4 99 34.4 -
Switzerland 38.2 137 37.0 155 37.8 158 38.1 142 37.7 -
Turkey 57.8 111 57.6 119 58.1 96 58.4 87 58.5 -
United Kingdom 94.2 59 94.4 57 93.3 58 96.0 59 94.7 -
Total 1397.5 97 1398.2 99 1402.0 99 1403.7 95 1363.9 95
Total OECD 4341.6 95 4228.1 92 4246.8 94 4325.1 93 4293.3 93
6
DAYS OF IEA Net Imports - 133 - 144 - 145 - 147 - 146
1 Total Stocks are industry and government-controlled stocks (see breakdown in table below). Stocks are primary national territory stocks on land (excluding utility stocks
and including pipeline and entrepot stocks where known) they include stocks held by industry to meet IEA, EU and national emergency reserves commitments and are
subject to government control in emergencies.
2 Note that days of forward demand represent the stock level divided by the forward quarter average daily demand and is very different from the days of net
imports used for the calculation of IEA Emergency Reserves.
3 End September 2010 forward demand figures are IEA Secretariat forecasts.
4 US figures exclude US territories. Total includes US territories.
5 Data not available for Iceland.
6 Reflects stock levels and prior calendar year's net imports adjusted according to IEA emergency reserve definitions (see www.iea.org/netimports.asp). Net exporting IEA countries are excluded
TOTAL OECD STOCKS

1 1
CLOSING STOCKS Total Government Industry Total Government Industry
controlled controlled
2
Millions of Barrels Days of Fwd. Demand
3Q2007 4166 1520 2646 83 30 53

4Q2007 4096 1524 2572 84 31 53
1Q2008 4101 1529 2572 87 32 54
2Q2008 4128 1526 2602 89 33 56
3Q2008 4186 1522 2664 89 32 56
4Q2008 4224 1527 2697 91 33 58
1Q2009 4297 1547 2750 97 35 62
2Q2009 4319 1561 2758 96 35 61
3Q2009 4342 1564 2778 95 34 61
4Q2009 4228 1564 2664 92 34 58
1Q2010 4247 1567 2680 94 35 59
2Q2010 4325 1563 2762 93 34 59
3Q2010 4293 1549 2744 93 34 60
1 Includes government-owned stocks and stock holding organisation stocks held for emergency purposes.
2 Days of forward demand calculated using actual demand except in 3Q2010 (when latest forecasts are used).


Table 6
Table 6 - IEA Member Country Destinations of Selected Crude Streams
IEA MEMBER COUNTRY DESTINATIONS OF SELECTED CRUDE STREAMS1
Year Earlier
2007 2008 2009 4Q09 1Q10 2Q10 3Q10 Jul 10 Aug 10 Sep 10 Sep 09 change
Saudi Light & Extra Light

North America 0.73 0.70 0.52 0.53 0.56 0.69 0.73 0.65 0.85 0.70 0.41 0.30
Europe 0.70 0.70 0.59 0.61 0.55 0.64 0.74 0.72 0.75 0.77 0.61 0.16
Pacific 1.19 1.22 1.28 1.32 1.25 1.17 1.15 1.20 1.14 1.13 1.18 -0.05
Saudi Medium
North America 0.56 0.64 0.40 0.34 0.38 0.36 0.33 0.30 0.31 0.39 0.44 -0.05
Europe 0.05 0.05 0.02 0.02 - 0.00 - - - - 0.02 -
Pacific 0.34 0.39 0.34 0.33 0.33 0.37 0.30 0.30 0.33 0.28 0.38 -0.10
Saudi Heavy
North America 0.09 0.07 0.03 0.03 0.02 0.02 0.03 0.04 0.02 0.02 0.02 0.00
Europe 0.11 0.09 0.02 0.01 0.00 0.00 0.00 - - 0.00 0.02 -0.02
Pacific 0.20 0.24 0.15 0.12 0.23 0.19 0.23 0.21 0.24 0.25 0.11 0.14
2
Iraqi Basrah Light
North America 0.50 0.60 0.40 0.40 0.42 0.43 0.28 0.34 0.27 0.25 0.46 -0.21
Europe 0.30 0.21 0.12 0.06 0.06 0.09 0.13 0.13 0.23 0.04 0.05 -0.02
Pacific 0.17 0.15 0.24 0.27 0.35 0.19 0.26 0.19 0.25 0.32 0.19 0.13
Iraqi Kirkuk
North America - 0.08 0.06 0.04 0.01 0.03 0.05 0.05 0.05 0.04 0.14 -0.10
Europe 0.11 0.23 0.31 0.29 0.33 0.27 0.25 0.27 0.18 0.31 0.34 -0.03
Pacific - - - - - - - - - - - -
Iranian Light
North America - - - - - - - - - - - -
Europe 0.27 0.23 0.15 0.16 0.20 0.24 0.33 0.40 0.41 0.18 0.15 0.03
Pacific 0.09 0.08 0.07 0.06 0.06 0.07 0.04 0.04 0.02 0.04 0.04 0.00
3
Iranian Heavy
North America - - - - - - - - - - - -
Europe 0.56 0.49 0.40 0.37 0.35 0.47 0.70 0.80 0.64 0.66 0.44 0.23
Pacific 0.64 0.61 0.57 0.56 0.61 0.44 0.53 0.63 0.38 0.57 0.58 -0.02
Venezuelan Light & Medium

North America 0.76 0.62 0.39 0.09 0.11 0.21 0.08 0.13 0.02 0.10 0.16 -0.06
Europe 0.08 0.06 0.07 0.02 0.01 0.02 0.05 0.03 0.09 0.01 0.04 -0.02
Pacific 0.01 - - - - - - - - - - -
Venezuelan 22 API and heavier

North America 0.68 0.65 0.75 0.75 0.89 0.83 0.96 0.99 1.07 0.83 1.01 -0.18
Europe 0.07 0.07 0.07 0.08 0.07 0.06 0.06 0.07 0.05 0.04 0.04 0.00
Pacific - - - - - - - - - - - -
Mexican Maya
North America 1.22 1.02 0.93 0.82 0.82 0.96 0.94 0.90 1.18 0.73 0.86 -0.13
Europe 0.14 0.14 0.10 0.12 0.12 0.11 0.11 0.08 0.14 0.11 0.10 0.01
Pacific - - - - - - - - - - - -
Mexican Isthmus
North America 0.01 0.01 0.01 0.00 0.03 0.02 0.02 0.01 0.01 0.05 - -
Europe 0.02 0.01 0.01 - - 0.02 - - - - - -
Pacific - - - - - - - - - - - -
Russian Urals
North America 0.06 0.05 0.15 0.06 0.08 0.13 0.08 - 0.22 0.02 0.18 -0.15
Europe 1.86 1.81 1.72 1.80 1.76 1.86 1.88 1.88 1.79 1.97 1.81 0.16
Pacific 0.00 - - - - - - - - - - -
4
Nigerian Light
North America 0.88 0.68 0.54 0.67 0.55 0.64 0.64 0.61 0.69 0.64 0.61 0.03
Europe 0.24 0.29 0.32 0.34 0.26 0.29 0.31 0.26 0.35 0.32 0.15 0.17
Pacific 0.01 - 0.00 0.01 - - - - - - - -
Nigerian Medium
North America 0.23 0.27 0.21 0.21 0.24 0.29 0.25 0.23 0.26 0.25 0.18 0.07
Europe 0.07 0.14 0.13 0.15 0.07 0.09 0.09 0.11 0.11 0.06 0.21 -0.14
Pacific 0.01 - - - - - - - - - - -
1 Data based on monthly submissions from IEA countries to the crude oil import register (in '000 bbl), subject to availability. May differ from Table 8 of the Report.
IEA North America includes United States and Canada.
IEA Europe includes all countries in OECD Europe except Hungary. The Slovak Republic and Poland is excluded through December 2007 but included thereafter.
IEA Pacific data includes Australia, New Zealand, Korea and Japan.
2 Iraqi Total minus Kirkuk.
3 Iranian Total minus Iranian Light.
4 33° API and lighter (e.g., Bonny Light, Escravos, Qua Iboe and Oso Condensate).


Table 7
Table 7 - Regional OECD Imports
REGIONAL OECD IMPORTS1,2
Year Earlier
2007 2008 2009 4Q09 1Q10 2Q10 3Q10 Jul-10 Aug-10 Sep-10 Sep-09 % change
Crude Oil
North America 8214 8046 7327 6717 7057 7902 7715 7968 7836 7329 7107 3%
Europe 9691 9776 8910 8676 8562 9157 9493 9548 9812 9105 8890 2%
Pacific 6718 6605 6082 6102 6445 5899 6159 6061 6177 6243 5984 4%
Total OECD 24622 24427 22319 21495 22063 22958 23367 23577 23826 22677 22211 2%
LPG
North America 28 31 13 5 12 7 7 7 7 5 0 100%
Europe 278 268 249 261 286 269 226 216 229 234 234 0%
Pacific 557 589 529 529 534 600 533 516 579 503 654 -23%
Total OECD 863 887 792 795 832 876 766 739 816 742 888 -16%
Naphtha
North America 40 56 22 12 23 28 59 65 61 50 8 507%
Europe 283 298 312 388 444 393 346 419 294 322 326 -1%
Pacific 794 776 841 896 953 899 855 918 798 849 866 -2%
Total OECD 1116 1130 1176 1296 1421 1320 1260 1403 1153 1221 1200 2%
3
Gasoline
North America 1128 1077 878 785 697 838 924 1031 976 759 763 -1%
Europe 179 215 193 62 163 196 207 228 190 202 271 -25%
Pacific 73 90 96 99 70 73 44 43 49 42 136 -69%
Total OECD 1380 1382 1166 946 931 1107 1175 1302 1215 1003 1171 -14%
Jet & Kerosene

North America 183 64 61 55 69 59 85 83 86 85 67 28%
Europe 373 401 451 444 439 358 478 375 510 550 522 5%
Pacific 43 34 53 48 46 37 29 32 26 30 32 -7%
Total OECD 599 500 566 546 553 454 591 490 621 665 621 7%
Gasoil/Diesel
North America 132 74 56 44 114 43 27 26 33 21 74 -72%
Europe 783 871 1033 1038 1132 885 931 952 831 1012 810 25%
Pacific 91 119 87 114 88 121 88 106 64 95 80 19%
Total OECD 1005 1064 1177 1196 1333 1048 1046 1085 928 1128 964 17%
Heavy Fuel Oil

North America 323 288 270 226 277 293 285 297 232 326 231 41%
Europe 436 458 534 544 564 545 504 437 488 591 568 4%
Pacific 95 125 113 79 136 104 127 118 136 126 94 35%
Total OECD 854 871 918 848 978 941 916 852 857 1043 892 17%
Other Products
North America 1050 1078 870 756 676 782 853 864 901 791 981 -19%
Europe 771 734 718 696 622 605 699 680 729 689 688 0%
Pacific 254 298 325 356 330 276 382 374 373 400 342 17%
Total OECD 2074 2110 1913 1809 1628 1664 1934 1918 2002 1880 2011 -6%
Total Products
North America 2883 2667 2171 1882 1868 2049 2238 2374 2297 2038 2125 -4%
Europe 3102 3245 3491 3432 3650 3252 3391 3308 3271 3601 3418 5%
Pacific 1906 2032 2045 2121 2157 2110 2059 2106 2025 2045 2204 -7%
Total OECD 7891 7944 7707 7436 7675 7411 7688 7788 7592 7683 7747 -1%
Total Oil
North America 11097 10713 9497 8600 8924 9952 9953 10342 10133 9367 9461 -1%
Europe 12793 13022 12401 12109 12211 12408 12884 12856 13083 12706 12309 3%
Pacific 8623 8637 8127 8223 8602 8008 8218 8167 8202 8288 8188 1%
Total OECD 32513 32371 30026 28931 29738 30368 31055 31365 31418 30360 29958 1%
1 Based on Monthly Oil Questionnaire data submitted by OECD countries in tonnes and converted to barrels.
2 Excludes intra-regional trade.
3 Includes additives.

© OECD/IEA 2010. All Rights Reserved
The International Energy Agency (IEA) makes every attempt to ensure, but does
not guarantee, the accuracy and completeness of the information or the clarity
of content of the Oil Market Report (hereafter the OMR). The IEA shall not be
liable to any party for any inaccuracy, error or omission contained or provided in
this OMR or for any loss, or damage, whether or not due to reliance placed by
that party on information in this OMR.
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10 December 2010

TAKING STOCK ........................................................................................................................................................................................................................ 3

OECD STOCKS ........................................................................................................................................................................................................................ 33

10 D ECEMBER 2010 3

Avg. Yearly Grow th, Avg. Yearly Grow th,

10 D ECEMBER 2010 5

Pulling it all together – the global balance to 2015

2009 2010 2011 2012 2013 2014 2015

Changes since June 2010 MTOGM

and non‐OPEC supply prospects -1.0 -2.0

in particular look brighter than -2.0 -4.0

at the margin is demonstrated 3.0 6.0

2015. As we noted in June -2.0 -4.0

10 D ECEMBER 2010 7

Global Oil Demand Growth 2009/2010/2011

Global Oil Demand: Oil Demand Sensitivity: Avg. Intensity

Base GDP & 3% Avg. Yearly Case

10 10 D ECEMBER 2010

Global GDP Growth: Global Oil Demand:

WORLD OECD Non-OECD OECD Non-OECD WORLD

OECD Demand: Non-OECD Demand:

10 D ECEMBER 2010 11

12 10 D ECEMBER 2010

Range 2005-2009 5-year avg

10 D ECEMBER 2010 13

Gasoline demand VMTs Autos Light Trucks

14 10 D ECEMBER 2010

10 D ECEMBER 2010 15

kb/d Germany: Heating Oil Demand kb/d Germany: Naphtha Demand

16 10 D ECEMBER 2010

OECD Pacific: m b/d OECD Pacific: LPG Demand

10 D ECEMBER 2010 17

18 10 D ECEMBER 2010

10 D ECEMBER 2010 19

20 10 D ECEMBER 2010

10 D ECEMBER 2010 21

Algeria 1.27 1.27 1.27 1.38 0.11 0.200 50%

Angola 1.65 1.68 1.66 2.00 0.34 0.244 33%

Ecuador 0.46 0.47 0.47 0.48 0.01 0.067 42%

Iran 3.68 3.70 3.72 3.90 0.18 0.562 16%

Nigeria3 2.15 2.20 2.12 2.40 0.28 0.319 0%

Qatar 0.80 0.80 0.82 1.00 0.18 0.122 33%

Saudi Arabia2 8.28 8.24 8.34 12.20 3.86 1.318 84%

UAE 2.31 2.33 2.32 2.70 0.38 0.379 87%

Venezuela4 2.23 2.21 2.19 2.42 0.23 0.364 49%

OPEC-11 26.68 26.76 26.76 32.83 6.07 4.201 54%

Total OPEC 29.20 29.19 29.24 35.38 6.14

22 10 D ECEMBER 2010

10 D ECEMBER 2010 23

24 10 D ECEMBER 2010

10 D ECEMBER 2010 25

mb/d Total Non-OPEC Supply mb/d Non-OPEC Supply: Change 2009-15

26 10 D ECEMBER 2010

10 D ECEMBER 2010 27

28 10 D ECEMBER 2010

mb/d Canada Total Oil Supply mb/d MexicoTotal Oil Supply

10 D ECEMBER 2010 29

30 10 D ECEMBER 2010

10 D ECEMBER 2010 31

Lower Baseline, But Still Strong Biofuels Growth in the Medium-Term

2008 2009 2010 2011 2012 2013 2014 2015

32 10 D ECEMBER 2010

Fax: (+33) 0*1 40 57 65 99