© OECD/IEA - 2012

Short and Medium Term Forecasting of Oil Markets

Energy Training Week

Paris, April 2013

© OECD/IEA - 2012

Short and Medium-Term Analysis & Forecasting:

Introduction

Antoine Halff

© OECD/IEA - 2012

1973/74 oil crisis

Avoid competition for limited supplies

“Go-it-alone”, uncoordinated policy ineffective

Coordinated action

mechanism for response

Safety net

emergency reserves ≥90 days of net oil imports

Demand restraint measures (7-10%)

Shared goals (1983) now comprise

Energy security, environmental protection, economic

growth, engagement

Origins: The impetus to establish the IEA

3

© OECD/IEA - 2012

Benchmark oil market analysis from IEA www.oilmarketreport.org

The benchmark oil market report since 1983, with extensive, up-to-date, statistical data plus 12-18 month global fundamentals outlook

Detailed, up to the minute market analysis underpins the IEA’s emergency response mandate

Seventh edition in October 2012 of this annual outlook looking five years ahead

Closes previous gap between short-term OMR and long-term World Energy Outlook (‘WEO’)

© OECD/IEA - 2012

5

Developed after calls by governments, analysts & market players for information on market & investment trends five years forward (‘investment cycle’)

Looks at potential market conditions under existing policies and investment plans

Essential bridge between the OMR’s 12-18-month projections and the WEO’s 30-year scenarios

Analysis of industry trends (N. American supply revolution, the “New Oil Map”, OPEC, refining, storage & logistics, trade, capacity investment & rationalisation, supply costs, fuel substitution, end-use efficiency, developing country demand, biofuel, crude oil quality, products availability & price formation)

MTOMR produced annually, but MT themes highlighted & developed year-round in the OMR

Medium term market analysis

© OECD/IEA - 2012

Data, analysis & projections available via website (2 weeks later for non-subscribers)

www.oilmarketreport.org

© OECD/IEA - 2012

Who Reads the OMR?

OMR & MODS data are together the IEA’s biggest publication revenue source

Government decision-makers, notably those

with emergency preparedness responsibility

Market analysts and consultants

International and national oil companies

The oil trade press

Oil consumers

Trading and shipping companies

The financial sector

The general public

OMR is free on www.oilmarketreport.org two weeks after release

© OECD/IEA - 2012

IEA sales by key publication

Statistics

WEO

I-Library

OMR

Other

ETP

© OECD/IEA - 2012

International Organisation

Subscription Agent/Bookseller

Government

Academia/

Research

Institute Trade/

Finance

Other

NGO

IEA Bookshop: 2012 sales by sector

Industry

© OECD/IEA - 2012

Do’s and dont’s

What we don’t do

Allow for random events in

projections

Forecast future OPEC policy

decisions or country crude

production levels

Forecast future price &

refining margin levels

Create ‘optimal’ policy &

investment scenarios

Analysis for emergency

response needs to show the

situation as it is or likely

will be, not how we wish it

to be

What we do

Analyse current & future

market fundamentals under

current policies & investment

plans

Forecast under “normal”

conditions (with seasonality)

Current OPEC supply & future

capacity

Global oil demand by country/product

Non-OPEC supply, by country, field-

by-field (assumed maximised)

Refining capacity availability & runs

Regional oil products availability

Future ‘call on OPEC & stock change’

Assess recent trends in stocks,

prices & margins

Advise in emergencies whether

IEA collective action is

appropriate

© OECD/IEA - 2012

National

Administration

Oil & Gas

Associations

Shell

ExxonMobil

Statoil, etc

Data for month - 2

OIM’s staple diet – Monthly Oil & Gas Statistics

25th ofmonth

© OECD/IEA - 2012

Other data sources are important too Net production per field current year.

Net production of saleable products (Norwegian share)

NGL = butane + ethane + isobutane + propane + LPG + gasoline + NGL mix. Condensate = Condensate. Sm3o.e. = oil + gas + NGL + condensate.

Field Period Oil

[mill Sm3] Gas

[bill Sm3] Cond.

[mill Sm3] NGL

[mill Sm3] Sm3o.e.

[mill]

2010 0.018059 0.000000 0.000000 0.000452 0.018511

jan.2010 0.002977 0.000000 0.000000 0.000076 0.003053

feb.2010 0.002601 0.000000 0.000000 0.000095 0.002696

mar.2010 0.003016 0.000000 0.000000 0.000149 0.003165

apr.2010 0.001829 0.000000 0.000000 0.000023 0.001852

may.2010 0.003143 0.000000 0.000000 0.000095 0.003238

jun.2010 0.001675 0.000000 0.000000 0.000031 0.001706

jul.2010 0.002818 0.000000 0.000000 - 0.000017 0.002801

Alve 2010 0.156861 0.537842 0.000000 0.182690 0.877393

jan.2010 0.024682 0.087727 0.000000 0.028796 0.141205

feb.2010 0.023156 0.078388 0.000000 0.026119 0.127663

mar.2010 0.024274 0.083820 0.000000 0.028695 0.136789

apr.2010 0.017258 0.058222 0.000000 0.020304 0.095784

may.2010 0.024072 0.082042 0.000000 0.028642 0.134756

jun.2010 0.022290 0.075561 0.000000 0.025831 0.123682

jul.2010 0.021129 0.072082 0.000000 0.024303 0.117514

Alvheim 2010 2.872653 0.265882 0.000000 0.000000 3.138535

jan.2010 0.418930 0.037109 0.000000 0.000000 0.456039

feb.2010 0.397883 0.035672 0.000000 0.000000 0.433555

mar.2010 0.444272 0.040498 0.000000 0.000000 0.484770

apr.2010 0.411991 0.039420 0.000000 0.000000 0.451411

may.2010 0.393766 0.037127 0.000000 0.000000 0.430893

jun.2010 0.402174 0.037393 0.000000 0.000000 0.439567

jul.2010 0.403637 0.038663 0.000000 0.000000 0.442300

Balder 2010 1.668151 0.057005 0.000000 0.000000 1.725156

jan.2010 0.256054 0.008937 0.000000 0.000000 0.264991

feb.2010 0.225217 0.009292 0.000000 0.000000 0.234509

mar.2010 0.237092 0.008095 0.000000 0.000000 0.245187

apr.2010 0.237420 0.007803 0.000000 0.000000 0.245223

may.2010 0.239213 0.007847 0.000000 0.000000 0.247060

jun.2010 0.219267 0.006173 0.000000 0.000000 0.225440

jul.2010 0.253888 0.008858 0.000000 0.000000 0.262746

JODI monthly aggregated data on supply, demand & stock change from Jan02

Huge advance in global data coverage, but quality can be variable

Much of OIM’s analysis requires more detailed national & company data (field-by-field, refinery or sector-specific)

Detailed data from alternative sources helps verify accuracy of formal IEA data submissions

Ormen Lange 2010 0.000000 12.218073 0.888170 0.000000 13.106243

jan.2010 0.000000 1.800511 0.123103 0.000000 1.923614

feb.2010 0.000000 1.867882 0.158536 0.000000 2.026418

mar.2010 0.000000 1.874864 0.128989 0.000000 2.003853

apr.2010 0.000000 1.993824 0.150339 0.000000 2.144163

may.2010 0.000000 1.860188 0.136818 0.000000 1.997006

jun.2010 0.000000 1.770593 0.125223 0.000000 1.895816

jul.2010 0.000000 1.050211 0.065162 0.000000 1.115373

Oseberg 2010 2.666577 1.982622 0.000000 0.576754 5.225953

jan.2010 0.506045 0.710064 0.000000 0.090328 1.306437

feb.2010 0.413199 0.308538 0.000000 0.105875 0.827612

mar.2010 0.395236 0.309167 0.000000 0.113134 0.817537

apr.2010 0.399463 0.360064 0.000000 0.120381 0.879908

may.2010 0.379695 0.292145 0.000000 0.095167 0.767007

jun.2010 0.287045 0.002581 0.000000 0.043886 0.333512

jul.2010 0.285894 0.000063 0.000000 0.007983 0.293940

Oseberg Sør 2010 1.474854 0.000000 0.000000 0.000000 1.474854

jan.2010 0.237797 0.000000 0.000000 0.000000 0.237797

feb.2010 0.218348 0.000000 0.000000 0.000000 0.218348

mar.2010 0.225302 0.000000 0.000000 0.000000 0.225302

apr.2010 0.207324 0.000000 0.000000 0.000000 0.207324

may.2010 0.215126 0.000000 0.000000 0.000000 0.215126

jun.2010 0.193270 0.000000 0.000000 0.000000 0.193270

jul.2010 0.177687 0.000000 0.000000 0.000000 0.177687

© OECD/IEA - 2012

The New Oil Map: Crude trade flows

Crude Exports in 2017 and Growth in 2011-17 for Key Trade Routes*(million barrels per day)

* Excludes Intra-Regional Trade

3.0

(+0.9) 4.6(-0.4)

0.6(-1.3)

2.5

1.9 (-0.2)

1.2 (+0.7)

-0.3

1.5

1.7 (+0.7)

(-1)

0.2(+0.2)

0.6Red number in brackets denotes growth in period 2011-17 (+0.2)

5.6

(+0.3)

Other Asia

China

OECD Europe

1.3(-0.6)

1.1 (+0.6)

OECD Pacific

0.1 (-0.2)

0.7(+0.3)

3.3 (-1.1)

NorthAmerica

© OECD/IEA - 2012

The New Oil Map: Demand Non-OECD demand overtakes OECD in 2014

OECD contracts by 200 kb/d per year while non-OECD grows 1.3 mb/d

OECD vs. Non-OECD Oil Demand

25

30

35

40

45

50

55

1996 1999 2002 2005 2008 2011 2014 2017

mb/d

OECD Non-OECD

© OECD/IEA - 2012

The New Oil Map: Refining capacity

Investments set to add:

7.5 mb/d of net crude distillation capacity by 2017

5.9 mb/d of upgrading capacity

5.4 mb/d of de-sulphurisation capacity

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2011 2012 2013 2014 2015 2016 2017

Crude Distillation Additions

OECD ChinaOther Asia Middle EastLatin America Other Non OECD

China37%

Other Asia

18%

Middle East

22%

Latin America

6%

Other17%

Regional Share of CDU Expansions

Non-OECD accounts for all growth

© OECD/IEA - 2012

The New Oil Map: Throughputs

34.0

35.0

36.0

37.0

38.0

39.0

1Q09 1Q10 1Q11 1Q12 1Q13

mb/dOECD vs. Non-OECD Crude Runs

OECD Non-OECD

© OECD/IEA - 2012

Oil market shift to the emerging markets calls for a shift in data availability too

All of expected demand growth is from non-

OECD markets

Asia & Mid East dominate new refining &

storage capacity build

OPEC crude & NGL, Brazil, Caspian are the

supply growth areas

Assessing market dynamics & pricing

pressures in future requires more, regular and

better non-OECD fundamentals data

© OECD/IEA - 2012

Expect the unexpected

However good the data, forecasts are always prone to uncertainties

0

5

10

15

20

25

Apr 11 Aug 11 Dec 11 Apr 12 Aug 12 Dec 12

TWh Japan: Nuclear Power Generation Scenarios

No nuclear restart Some nuclear restart

Normal nuclear power

Shortfall to be filled by oil and gas

© OECD/IEA - 2012

How do we use oil market analysis for emergency response?

Intervention should be a last resort

High prices alone are no reason to intervene

But leaving a significant supply disruption to the

market could generate a significant economic cost

The market will always balance supply and

demand, given time and at the right price

Can the market cope with the disruption using

existing resources and mechanisms?

Will there be a significant cost?

Every supply disruption is different

Speed & unity of response are key factors

© OECD/IEA - 2012

Primary Goal of IEA Oil Market Analysis is to Inform Government Policy Makers

OECD Total Oil Stocks Scenario

2500

2600

2700

2800

Jan Apr Jul Oct Jan

mb

Range 2006-2010 Avg 2006-20102010 2011e*2011 June ScenarioJuly Scenario

* OPEC crude production assummed f lat at 30.3 mb/d from August 2011 onwards

-1400

-1200

-1000

-800

-600

-400

-200

0

July Aug Sep Oct Nov Dec

kb/d US GoM Hurricane Outages

Range 2004-08 20052008 5-yr avg

Gustav & Ike

Katrina & Rita

Despite similar volume loss, 2008 was not 2005 all over again

In 2008, falling demand, higher stocks, higher spare OPEC capacity, plenty idle refining capacity elsewhere & falling prices, so no stock release

In 2011, Libya Collective Action aimed to provide liquidity and operational flexibility to a market confronting lost Libyan barrels, uncertain OPEC response and 3Q demand increase

Good data, analysis & communications are an ongoing necessity, not just for during crises

© OECD/IEA - 2012

OMR focus on supply/demand fundamentals Table 1

WORLD OIL SUPPLY AND DEMAND(million barrels per day)

2008 2009 1Q10 2Q10 3Q10 4Q10 2010 1Q11 2Q11 3Q11 4Q11 2011 1Q12 2Q12 3Q12 4Q12 2012

OECD DEMAND

North America 24.2 23.3 23.4 23.7 24.1 23.9 23.8 23.8 23.3 23.6 23.4 23.5 23.3 23.1 23.6 23.5 23.4

Europe 15.4 14.7 14.3 14.3 14.9 14.8 14.6 14.2 14.1 14.7 14.1 14.3 13.7 13.6 14.3 14.1 13.9

Pacific 8.1 7.7 8.2 7.3 7.6 8.1 7.8 8.3 7.1 7.7 8.3 7.9 8.6 7.4 7.6 8.1 7.9

Total OECD 47.6 45.6 46.0 45.3 46.7 46.7 46.2 46.3 44.5 45.9 45.7 45.6 45.6 44.1 45.5 45.7 45.2

NON-OECD DEMAND

FSU 4.2 4.2 4.4 4.3 4.6 4.6 4.5 4.5 4.6 4.8 4.8 4.7 4.6 4.7 4.9 4.9 4.8

Europe 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 0.7 0.7 0.7

China 7.7 8.1 8.6 9.1 8.9 9.7 9.1 9.5 9.5 9.3 9.7 9.5 9.8 9.9 9.7 10.1 9.9

Other Asia 9.7 10.1 10.4 10.6 10.2 10.6 10.4 10.7 10.7 10.4 10.9 10.7 10.9 11.0 10.7 11.2 10.9

Latin America 6.0 6.0 6.0 6.3 6.5 6.4 6.3 6.3 6.5 6.7 6.6 6.5 6.4 6.6 6.8 6.7 6.7

Middle East 7.3 7.5 7.4 7.8 8.3 7.7 7.8 7.6 8.0 8.5 8.0 8.0 7.7 8.2 8.6 8.1 8.2

Africa 3.3 3.3 3.3 3.4 3.4 3.4 3.4 3.4 3.3 3.3 3.4 3.3 3.5 3.5 3.5 3.5 3.5

Total Non-OECD 38.9 39.9 40.8 42.2 42.5 43.1 42.2 42.7 43.4 43.6 44.1 43.5 43.7 44.6 45.0 45.4 44.7

Total Demand1 86.6 85.6 86.8 87.5 89.1 89.8 88.3 89.0 87.9 89.6 89.8 89.1 89.3 88.7 90.5 91.1 89.9

OECD SUPPLY

North America4

13.3 13.6 14.0 14.0 14.1 14.4 14.1 14.4 14.3 14.6 15.0 14.6 15.0 14.8 15.0 15.3 15.1

Europe 4.8 4.5 4.5 4.1 3.8 4.2 4.1 4.1 3.8 3.6 3.8 3.8 3.8 3.6 3.5 3.8 3.7

Pacific 0.6 0.7 0.6 0.6 0.6 0.6 0.6 0.5 0.5 0.5 0.6 0.5 0.6 0.6 0.7 0.7 0.6

Total OECD 18.8 18.8 19.1 18.8 18.5 19.1 18.9 19.0 18.6 18.7 19.4 18.9 19.4 19.1 19.3 19.8 19.4

NON-OECD SUPPLY

FSU 12.8 13.3 13.5 13.5 13.5 13.6 13.5 13.6 13.6 13.5 13.6 13.6 13.7 13.8 13.7 13.9 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 0.1 0.1

China 3.8 3.9 4.0 4.1 4.1 4.2 4.1 4.2 4.2 4.1 4.0 4.1 4.1 4.2 4.1 4.2 4.2

Other Asia2

3.7 3.6 3.7 3.7 3.7 3.7 3.7 3.6 3.5 3.5 3.6 3.6 3.6 3.6 3.5 3.5 3.5

Latin America2,4

3.7 3.9 4.0 4.1 4.1 4.1 4.1 4.2 4.2 4.2 4.3 4.2 4.3 4.4 4.5 4.5 4.4

Middle East 1.7 1.7 1.7 1.7 1.7 1.8 1.7 1.8 1.7 1.7 1.5 1.7 1.4 1.4 1.5 1.5 1.5

Africa2

2.6 2.6 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.6 2.5 2.4 2.3 2.3 2.4 2.3

Total Non-OECD 28.4 29.1 29.6 29.7 29.8 30.0 29.8 30.1 29.7 29.7 29.7 29.8 29.8 29.8 29.7 30.1 29.9

Processing Gains3 2.0 2.0 2.0 2.1 2.1 2.1 2.1 2.2 2.1 2.1 2.2 2.2 2.3 2.2 2.2 2.3 2.3

Global Biofuels4 1.4 1.6 1.4 2.0 2.1 1.8 1.8 1.5 1.9 2.2 1.8 1.8 1.6 1.9 2.2 2.0 1.9

Total Non-OPEC2 50.6 51.5 52.1 52.5 52.6 53.1 52.6 52.7 52.3 52.7 53.1 52.7 53.0 53.1 53.5 54.2 53.5

Non-OPEC: Historical Composition2 49.6 51.5 52.1 52.5 52.6 53.1 52.6 52.7 52.3 52.7 53.1 52.7 53.0 53.1 53.5 54.2 53.5

OPEC

Crude5

31.6 29.1 29.3 29.3 29.6 29.5 29.4 30.0 29.5 30.0 30.4 30.0

NGLs 4.5 4.9 5.2 5.2 5.4 5.6 5.3 5.7 5.7 5.8 5.9 5.8 6.1 6.2 6.5 6.5 6.3

Total OPEC2 36.1 34.1 34.5 34.4 35.0 35.1 34.8 35.7 35.2 35.8 36.3 35.7

OPEC: Historical Composition2 37.1 34.1 34.5 34.4 35.0 35.1 34.8 35.7 35.2 35.8 36.3 35.7

Total Supply6 86.7 85.6 86.6 87.0 87.6 88.2 87.3 88.5 87.5 88.4 89.4 88.5

STOCK CHANGES AND MISCELLANEOUS

Reported OECD

Industry 0.3 -0.1 0.4 0.9 -0.1 -0.8 0.1 -0.4 0.5 -0.1 -0.7 -0.2

Government 0.0 0.1 0.0 -0.1 -0.1 0.1 0.0 0.0 0.0 -0.4 0.1 -0.1

Total 0.3 0.0 0.4 0.9 -0.2 -0.7 0.1 -0.5 0.5 -0.5 -0.6 -0.3

Floating Storage/Oil in Transit 0.0 0.3 -0.2 0.1 -0.2 -0.3 -0.2 0.2 -0.2 -0.2 -0.1 -0.1

Miscellaneous to balance7

-0.2 -0.3 -0.4 -1.4 -1.1 -0.6 -0.9 -0.3 -0.7 -0.4 0.3 -0.3

Total Stock Ch. & Misc 0.2 0.0 -0.2 -0.5 -1.5 -1.7 -1.0 -0.6 -0.4 -1.1 -0.4 -0.6

Memo items:

Call on OPEC crude + Stock ch.8 31.5 29.2 29.5 29.8 31.1 31.2 30.4 30.6 29.9 31.1 30.8 30.6 30.1 29.4 30.5 30.4 30.1

Adjusted Call on OPEC + Stock ch.9 31.3 28.8 29.1 28.3 30.0 30.6 29.5 30.3 29.2 30.7 31.1 30.3 29.6 28.8 30.0 29.8 29.5

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 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.

© OECD/IEA - 2012

The bottom of the table tells us a lot

‘Call on OPEC Crude & Stock Change’ = Global oil demand minus (Non-OPEC oil supply + OPEC NGLs)

This is the notional amount of crude OPEC would need to produce each quarter to hold stocks steady

Can OPEC really respond to the “Call”? Does it want to?

Miscellaneous to balance: the difference between historical supply and demand, net of identifiable OECD stock changes

We do not try to ‘force’ the global balance to get mtb=0

Negative mtb suggests non-OECD stock draws, that demand is over-stated, supply is understated or a combination of these

Table 1

WORLD OIL SUPPLY AND DEMAND(million barrels per day)

2008 2009 1Q10 2Q10 3Q10 4Q10 2010 1Q11 2Q11 3Q11 4Q11 2011 1Q12 2Q12 3Q12 4Q12 2012

OECD DEMAND

North America 24.2 23.3 23.4 23.7 24.1 23.9 23.8 23.8 23.3 23.6 23.4 23.5 23.3 23.1 23.6 23.5 23.4

Europe 15.4 14.7 14.3 14.3 14.9 14.8 14.6 14.2 14.1 14.7 14.1 14.3 13.7 13.6 14.3 14.1 13.9

Pacific 8.1 7.7 8.2 7.3 7.6 8.1 7.8 8.3 7.1 7.7 8.3 7.9 8.6 7.4 7.6 8.1 7.9

Total OECD 47.6 45.6 46.0 45.3 46.7 46.7 46.2 46.3 44.5 45.9 45.7 45.6 45.6 44.1 45.5 45.7 45.2

NON-OECD DEMAND

FSU 4.2 4.2 4.4 4.3 4.6 4.6 4.5 4.5 4.6 4.8 4.8 4.7 4.6 4.7 4.9 4.9 4.8

Europe 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 0.7 0.7 0.7

China 7.7 8.1 8.6 9.1 8.9 9.7 9.1 9.5 9.5 9.3 9.7 9.5 9.8 9.9 9.7 10.1 9.9

Other Asia 9.7 10.1 10.4 10.6 10.2 10.6 10.4 10.7 10.7 10.4 10.9 10.7 10.9 11.0 10.7 11.2 10.9

Latin America 6.0 6.0 6.0 6.3 6.5 6.4 6.3 6.3 6.5 6.7 6.6 6.5 6.4 6.6 6.8 6.7 6.7

Middle East 7.3 7.5 7.4 7.8 8.3 7.7 7.8 7.6 8.0 8.5 8.0 8.0 7.7 8.2 8.6 8.1 8.2

Africa 3.3 3.3 3.3 3.4 3.4 3.4 3.4 3.4 3.3 3.3 3.4 3.3 3.5 3.5 3.5 3.5 3.5

Total Non-OECD 38.9 39.9 40.8 42.2 42.5 43.1 42.2 42.7 43.4 43.6 44.1 43.5 43.7 44.6 45.0 45.4 44.7

Total Demand1 86.6 85.6 86.8 87.5 89.1 89.8 88.3 89.0 87.9 89.6 89.8 89.1 89.3 88.7 90.5 91.1 89.9

OECD SUPPLY

North America4

13.3 13.6 14.0 14.0 14.1 14.4 14.1 14.4 14.3 14.6 15.0 14.6 15.0 14.8 15.0 15.3 15.1

Europe 4.8 4.5 4.5 4.1 3.8 4.2 4.1 4.1 3.8 3.6 3.8 3.8 3.8 3.6 3.5 3.8 3.7

Pacific 0.6 0.7 0.6 0.6 0.6 0.6 0.6 0.5 0.5 0.5 0.6 0.5 0.6 0.6 0.7 0.7 0.6

Total OECD 18.8 18.8 19.1 18.8 18.5 19.1 18.9 19.0 18.6 18.7 19.4 18.9 19.4 19.1 19.3 19.8 19.4

NON-OECD SUPPLY

FSU 12.8 13.3 13.5 13.5 13.5 13.6 13.5 13.6 13.6 13.5 13.6 13.6 13.7 13.8 13.7 13.9 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 0.1 0.1

China 3.8 3.9 4.0 4.1 4.1 4.2 4.1 4.2 4.2 4.1 4.0 4.1 4.1 4.2 4.1 4.2 4.2

Other Asia2

3.7 3.6 3.7 3.7 3.7 3.7 3.7 3.6 3.5 3.5 3.6 3.6 3.6 3.6 3.5 3.5 3.5

Latin America2,4

3.7 3.9 4.0 4.1 4.1 4.1 4.1 4.2 4.2 4.2 4.3 4.2 4.3 4.4 4.5 4.5 4.4

Middle East 1.7 1.7 1.7 1.7 1.7 1.8 1.7 1.8 1.7 1.7 1.5 1.7 1.4 1.4 1.5 1.5 1.5

Africa2

2.6 2.6 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.6 2.5 2.4 2.3 2.3 2.4 2.3

Total Non-OECD 28.4 29.1 29.6 29.7 29.8 30.0 29.8 30.1 29.7 29.7 29.7 29.8 29.8 29.8 29.7 30.1 29.9

Processing Gains3 2.0 2.0 2.0 2.1 2.1 2.1 2.1 2.2 2.1 2.1 2.2 2.2 2.3 2.2 2.2 2.3 2.3

Global Biofuels4 1.4 1.6 1.4 2.0 2.1 1.8 1.8 1.5 1.9 2.2 1.8 1.8 1.6 1.9 2.2 2.0 1.9

Total Non-OPEC2 50.6 51.5 52.1 52.5 52.6 53.1 52.6 52.7 52.3 52.7 53.1 52.7 53.0 53.1 53.5 54.2 53.5

Non-OPEC: Historical Composition2 49.6 51.5 52.1 52.5 52.6 53.1 52.6 52.7 52.3 52.7 53.1 52.7 53.0 53.1 53.5 54.2 53.5

OPEC

Crude5

31.6 29.1 29.3 29.3 29.6 29.5 29.4 30.0 29.5 30.0 30.4 30.0

NGLs 4.5 4.9 5.2 5.2 5.4 5.6 5.3 5.7 5.7 5.8 5.9 5.8 6.1 6.2 6.5 6.5 6.3

Total OPEC2 36.1 34.1 34.5 34.4 35.0 35.1 34.8 35.7 35.2 35.8 36.3 35.7

OPEC: Historical Composition2 37.1 34.1 34.5 34.4 35.0 35.1 34.8 35.7 35.2 35.8 36.3 35.7

Total Supply6 86.7 85.6 86.6 87.0 87.6 88.2 87.3 88.5 87.5 88.4 89.4 88.5

STOCK CHANGES AND MISCELLANEOUS

Reported OECD

Industry 0.3 -0.1 0.4 0.9 -0.1 -0.8 0.1 -0.4 0.5 -0.1 -0.7 -0.2

Government 0.0 0.1 0.0 -0.1 -0.1 0.1 0.0 0.0 0.0 -0.4 0.1 -0.1

Total 0.3 0.0 0.4 0.9 -0.2 -0.7 0.1 -0.5 0.5 -0.5 -0.6 -0.3

Floating Storage/Oil in Transit 0.0 0.3 -0.2 0.1 -0.2 -0.3 -0.2 0.2 -0.2 -0.2 -0.1 -0.1

Miscellaneous to balance7

-0.2 -0.3 -0.4 -1.4 -1.1 -0.6 -0.9 -0.3 -0.7 -0.4 0.3 -0.3

Total Stock Ch. & Misc 0.2 0.0 -0.2 -0.5 -1.5 -1.7 -1.0 -0.6 -0.4 -1.1 -0.4 -0.6

Memo items:

Call on OPEC crude + Stock ch.8 31.5 29.2 29.5 29.8 31.1 31.2 30.4 30.6 29.9 31.1 30.8 30.6 30.1 29.4 30.5 30.4 30.1

Adjusted Call on OPEC + Stock ch.9 31.3 28.8 29.1 28.3 30.0 30.6 29.5 30.3 29.2 30.7 31.1 30.3 29.6 28.8 30.0 29.8 29.5

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 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.

© OECD/IEA - 2012

In conclusion

Data collection underpins the projections

Sisyphean task

Non-OECD ascent raises new challenges

Objective analysis and forecasts are vital for decision making at the time of a supply crisis

Modeling approach is kept deliberately simple

An outlook rests on key assumptions – if those change, the forecast will change

Expect the unexpected – weather, natural disasters, conflict, mechanical stoppages can all influence supply/demand at the margin

Successful forecasting/projecting relies just as much upon analyst’s judgment as it does

on mechanical modeling.