oill and gas basics jpm oct 2006
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O CT OB ER 2 0 0 6
O I L & G A S B A SI CS
STRIC
TLY
PRIVATE
AND
CONFIDENTI
AL
Katherine Spector(1-212) 834-2031
kather [email protected]
Scott Speaker
(1-212) 834-3878
scott [email protected]
Krist i Jones(1-212) 834-2835
kri st i . l . j [email protected]
Sung Yoo
(1-212) 834-7045
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This presentat ion was prepared exclusively for t he benefi t and internal use of the client in order to indicate, on a preliminary basis, the feasibil it y of apossible t ransaction or t ransactions and does not carry any right of publicat ion or disclosure to any other part y. This presentat ion is incomplete wit houtreference to, and should be viewed solely in conjunction wit h, t he oral bri efing provided by JPMorgan. Neither this presentat ion nor any of i ts contentsmay be used for any other purpose wit hout t he prior wri t ten consent of JPMorgan.
The information in this presentation is based upon management forecasts and reflects prevailing conditions and our views as of this date, all of which aresubject to change. In preparing this presentat ion, we have reli ed upon and assumed, wit hout independent verif icat ion, the accuracy and completeness ofall i nformati on available from public sources or which was provided to us by or on behalf of t he client or which was otherwise reviewed by us. In addit ion,our analyses are not and do not purport to be appraisals of t he assets, stock, or business of the client . The information in t his presentat ion does not t akeint o account t he effect s of a possible tr ansaction or t ransactions involving an actual or potent ial change of control, which may have signifi cant valuationand other effects.
JPMorgan is a market ing name for investment banking businesses of J.P. Morgan Chase & Co. and it s subsidiaries worl dwide. Securi t ies, syndicated loanarranging, f inancial advisory and other investment banking activi t ies are perf ormed by J.P. Morgan Securit ies Inc. and its securit ies aff il iates, and lending,derivati ves and other commerci al banking activit ies are perf ormed by JPMorgan Chase Bank and it s banking aff il iat es. JPMorgan deal t eam members may
be employees of any of t he foregoing enti t ies.
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Volat il it y of Various Markets
Volat il it y of Various Markets
Energy is signif icant ly more volatile than other markets
0%
20%
40%
60%
80%
100%
120%
140%
160%
180%
200%
Jan-01 Sep-01 Jun-02 Mar-03 Nov-03 Aug-04 May-05 Feb-06
Power EUR GLD CL NG HO SPX 10-yr T bills
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Agenda
Page
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References, Websites and Data Releases to Watch
Natural Gas Specif ics
What s the Story This Year?
The Big Picture: Macro Oil Fundamentals
Oil Specifics
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From the well t o the tank. . .
Source: JPMorgan Energy Strategy
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Market drivers to watch
Macro economy
Sectoral t rends are growth sector
energy intensive?
Power generation t rends what kind
of fuel does new generat ion use? Transportation trends number and
type of cars sold?
Tax and subsidy regimes distort
price signals to consumers and
affect their consumpt ion behavior
Weather, seasonalit y winter heating
demand, summer cooling demand,holidays, vacation and travel trends
Non-oil fuel markets, subst it uti on
(e.g. gas, coal, hydro, nuclear)
Misc events e.g. SARS, Sep. 11
Upstream investment capacity
addit ions? Cost? Location? Type of
crude?
Natural decline rates Field age, f ield
maintenance, geological makeup
Geopolitics (e.g. Iran, Nigeria)
Field maintenance, unplanned outages
Weather (e.g. hurr icanes)
OPEC decisions and politics internal
polit ics, spare capacit y, relat ionshipswith consumer countries
Level relati ve to long term t rend and
normal seasonality
Level relative to demand
Regional distribution
Levels at t ransit points
Crude versus refined product levels
Oil DemandOil Demand Oil SupplyOil Supply Oil InventoriesOil Inventories
Deals associated with
mergers/ acquisit ions
Speculative f lows
Tanker supply/ demand/ rates
Seaborne disruptions weather, t raff ic,
accidents
Port capacity, availability
Pipeline capacit y/ nominat ions
Refinery capacit y/ investment
Planned outages, unplanned outages
Refi ning economics, run rates
Refined product yields
OtherOther DistributionDistribution Oil RefiningOil Refining
Source: JPMorgan Energy Strategy
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Price relat ionships to watch. . .and what JPMorgan t rades
Time spreads
e.g. Q1 vs. Q3; winter vs. summer, Cal 05vs. Cal 06
Regional spreads
e.g. NYMEX West Texas Int ermediate vs.IPE Brent , NY Harbor gasoline vs. US Gulfgasoline
Crude vs. ref ined product spreads
Cracks (e.g. crude-gasoline;crude-heat ing oil)
Refinery margins
Crude grade differentials (physical trade only)
e.g. West Texas Intermediate vs.West Texas Sour; Bonny Light vs. Brent
Product vs. product spreads e.g. gasoline-heating oil
Interfuel spreads
e.g. natural gas-heating oil
Oil
Crude
WTI
Brent
Tapis
Dubai Refined products
US market :
NYMEX heat ing oi l
US Gulf Coast heat ing oil
US Gulf Coast j et fuel
NYMEX gasolineEuropean market :
IPE gasoil
Gasoil 0.2%CIF NWE
Jet fuel cargoes CIF NWE
EN590 cargoes CIF NWE
1%and 3.5%fuel oil cargoes FOB NWEAsian market :
Singapore j et fuel
Natural Gas:
NYMEX natural gas
European natural gas priced as oil -referencedformula
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Source: JPMorgan Energy Strategy
How oil (gas) trades
Formal Exchanges
Int l Petroleum Exchange(London)
Brent Crude
1 lot = 1,000 bbl
Gas Oil
1 lot = 100 tonnes = 750 bbl
NY Mercant ile Exchange
West Texas Intermediate(Light, Sweet) Crude
1 lot = 1,000 bbl
Heating Oil
1 lot = 42,000 gallons = 1,000 bbl
Unleaded Gasoline
1 lot = 42,000 gallons = 1,000 bbl
Henry Hub Natural Gas
1 lot = 10,000 MMBtu
Over-the-Counter
Swaps/Options
Variety Of RegionalBenchmark Crudes andRefined Products. . .
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Maj or global crude benchmarks and oil market centers
Dubai
London (IPE)
Dated BrentUrals
WTINew York(NYMEX)
Tapis
Singapore
Oman
Source: JPMorgan Energy Strategy
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Risk exposure and management st rategies
Production
Consumption
Source: JPMorgan Energy Strategy
Exposure Type Risk Management St rategy
Price of crude
Cost of t ransport ation,insurance, duty/ tarif f
Cost of carry (time valueof money), t ime spread
Refinery margins
Refined product price
Locat ional/ basis risk
Retail margins
Producer hedging: swaps or put options
Freight hedging
Hedging with time spreads
Hedging cracks (spread between crudeand ref ined products) or f ull margins
Consumer hedging: swaps or call options
Hedging product product risk,or regional risk
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Convent ions of the oil market
Commodity Lot Size Quote Unit
Crude (global) 1,000 barrels US$/ barrel
Gasoline (US) 42,000 gallons cents/ gallon
Heat ing oil (US) 42,000 gallons cents/ gallon
Gas oil (Europe) 100 metric tons US$/ metric ton
Jet fuel (Europe) 100 met ric tons US$/ met ric ton
Natural gas (US) 10,000 MMBtu US$/ MMBtu
BenchmarksBenchmarks
Barges: 1,000 - 5,000 MT (2 - 8 days loading)
Cargoes: 10,000 - 25,000 MT (15 days loading)
ParcelParcel
Delivery specifications are factored into the cost of products. For example
Free on Board ( FOB )
Cost Insurance Freight ( CIF )
In the US, products may be priced as pipe , barge , or waterborne based on delivery method
Delivery MethodsDelivery Methods
Europe: Amsterdam-Rotterdam-Antwerp; Arab Gulf ; Medit erranean; North West Europe; Rotterdam.
United States: New York Harbour; Los Angeles; San Francisco; US Gulf Coast ; Midcont inent; West Coast .
Singapore
Main Locati onsMain Locati ons
Source: JPMorgan Energy Strategy
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For example. . .
What is the price of spot fuel oil relative to crude?
What region?Europe.
Rot t erdam or Med?Med.
What sulphur content ?1%.
CIF or FOB? CIF.
Barge or cargo? Cargo. $239/ tonne
Compare to what crude?Urals.
36.60 x $1.34 - $239 x 1 tonne = $13.16/bbl
1 bbl Urals 1 1 tonne FO 6.66 bbl
Ext ensions of t his idea?
Look at the forward spreads; l ook at the spread to the US or Asian fuel cracks
Source: JPMorgan Energy Strategy
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Backwardation vs. contango
Backwardation vs. Contango CurvesBackwardation vs. Contango Curves
$4.70
$4.80
$4.90
$5.00
$5.10
$5.20
$5.30
M01 M05 M09 M13 M17 M21 M25 M29 M33
In US$/bb l
contango curve
backwardation curve
Source: JPMorgan Energy Strategy
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More backwardation than contango
Contango vs. BackwardationContango vs. Backwardation The oil curve shif ts regularly
between backwardation and
contango
Historically, oil has spentmore time in backwardation
than contango
Backwardation has been
steeper than periods of
contango
0
10
20
30
40
50
60
70
80
90
$(11) $(9) $(7) $(5) $(3) $(1) $1 $3 $5 $7 $9 $11
N ote: M 02M13 in U S$/bbl
Source: JPMorgan Energy Strategy
Contango Backwardation
Number of instances
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Agenda
Page
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References, Websites and Data Releases to Watch
Natural Gas Specif ics
What s the Story This Year?
The Big Picture: Macro Oil Fundamentals
Oil Specifics
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How is crude oil related to other oils, l ike gasoline and heat ing oil?
Crude oil is what gets pumped out of t he ground. Very
little crude oil is consumed directly it is a raw
material that has to be refined into other products, such
as gasoline and heating oil
Other products that are derived from crude oil include:Jet fuel, diesel, residual fuel oil, naphtha, kerosene,
lubricants, tar, asphalt , pet rochemicals, fert il izers,
and plastics
The dif ference between the price of a finished product,
such as gasoline, and the price of crude oil is oftenreferred to as the crack spread. A crack spread is a
very simplistic representation of how much money a
ref iner makes by turning crude into products
A refinery netback is the crude price at which a refiner
breaks even, given the value of the finished product
slate minus other costs to the refiner such as transport
costs, ref inery fuel costs, etc.
A refinery margin is essent ially the refiner s profit
i.e. the value of the product slate, minus the cost of
crude inputs and other expenses
Source: JPMorgan Energy Strategy
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Is all crude oil the same?
There are many different grades of crude oil. All grades have dif ferent qualities, and sell for
different prices based on their qualities
When we talk about l ight,
sweet crude, we mean grades
with a high API gravity number,and a low sulfur content . A
heavy, sour crude has a low
API gravity and a high sulfur
content
In general, light/ sweet crudetends to sell at a higher price
than heavy/ sour crude
In general, refiners can produce
a higher yield of high quality
refined products, such asgasoline, by running light/ sweet
crudes. Heavy/ sour grades yield
less gasoline, and more of the
dirty products such as fuel oilSource: JPMorgan Energy Strategy
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Where are most of the worlds oil reserves?
Source: JPMorgan Energy Strategy, BP Statistical Handbook (June 2006)
Proved Oil Reserves (end 2005)Proved Oil Reserves (end 2005)
40.259.5
103.5 114.3140.5
742.7
Asia Pacific North America Africa South & Central
America
Europe & Eurasia Middle East
In thousand million barrels
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Top Oil Consumers (2005)Top Oil Consumers (2005)
Where are the worlds top consumers of oil?
FSU
5%
Japan
6%
China
9%
United States
25%
Other49%
India
3%
Germany
3%
Source: JPMorgan Energy Strategy, BP Statistical Handbook (June 2006)
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US Gasoline Demand & Exploration Based on Fuel EfficiencyUS Gasoline Demand & Exploration Based on Fuel Efficiency
US gasoline: 12% of global demand and growing
6
7
8
9
10
11
12
1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013
In million b/d
Historical Gasoline Demand
Extrapolation at today's MPGAt 22 MPG
At 24 MPG
At 26 MPG
At 28 MPG
At 30 MPG
At 30 MPG With Staggered Fleet Turnover
Source: JPMorgan Energy Strategy, EIA
270kbd
1.4mbd
2.2mbd
2.8mbd
3.4mbd
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Who are the world s top producers of crude oil?
The world s biggest producers are not
necessarily t he same as the world s
biggest exporters. For example, the US
and China produce a lot of oil, but
export very little given high domesticdemand
OPEC members Saudi Arabia and Iran
are the world s biggest exporters of
crude oil
2005 Averages2005 Averages
Note: Bold = OPEC membersSource: JPMorgan Energy St rat egy, IEA
Volume in kbd
Producer Volume Share of Global ProductionRussia 9,185 12.5%Saudi Arabia 9,063 12.4%
United States 5,131 7.0%Iran 3,879 5.3%China 3,617 4.9%Mexico 3,334 4.6%Venezuela 2,706 3.7%Norway 2,506 3.4%UAE 2,458 3.4%Nigeria 2,405 3.3%
Kuwait 2,133 2.9%Iraq 1,813 2.5%Canada 1,805 2.5%Libya 1,640 2.2%Brazil 1,634 2.2%UK-offshore 1,560 2.1%Algeria 1,345 1.8% Angola 1,245 1.7%Kazakhstan 1,025 1.4%
Indonesia 942 1.3%Qatar 796 1.1%Malaysia 727 1.0%Oman 722 1.0% Argentina 665 0.9%India 663 0.9%Other 10,206 13.9%
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What is OPEC s role
OPEC does not set prices. OPEC sets product ion quotas. Current ly 10 of the
cart el s 11 members are subj ect to group quotas; Iraq is exempt. Saudi Arabia is
by far the group s biggest and most influent ial member
What is OPEC s ideal pr ice?
Contrary to popular believe, i t is not to OPEC s advantage to target as high an oil
price as possible. The cartel wants to maximize revenues, but needs consumers asmuch as consumers need OPEC oil. At very high oil prices, OPEC faces two risks:
1. High oil prices could reduce economic growth and oil demand growth
2. High oil prices could encourage higher-cost non-OPEC producers to
make investments that would increase global oil supply, and reduceOPEC s market share
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A li t t le history. . .
US Refiner Acquisit ion Price of Imported CrudeUS Refiner Acquisit ion Price of Imported Crude
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
$100
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006
In US$/bb l
Nominal Real
Source: JPMorgan Energy Strategy, EIA
Gulf War I
Iran-IraqWar
NetbackPricing
Non-OPEC compet it iongrows, pr ice war
Exxon Valdezspill
Soviet Unioncollapse Asian Crisis
9/11
Venezuela Crisis,Gulf War II,Nigeria st ri ke
Hurricane Ivan
Nigerian st ri ke,cold winter
HurricaneKatr ina & Rit a
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Unt il this bull run, loss of market share was a real concern for OPEC
Shift ing Market ShareShift ing Market Share
34%
35%
36%
37%
38%
39%
40%
41%
42%
'95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06
5.5
6.5
7.5
8.5
9.5
10.5
11.5
12.5
OPEC Share of Global Product ion
Saudi Oil Production
FSU Oil Production
OPEC Share of Global Oil Production (%) FSU/Saudi Oil Production (mbd)
Source: JP Morgan Energy Strategy, IE A, OPE C
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Keeping the cartel t ogether can be tough, too
The Prisoner s (OPEC Member s) DilemmaThe Prisoner s (OPEC Member s) Dilemma
Source: JPMorgan Energy St rat egy
Cut Production Cheat on Quotas
CutProduction
(6,6) (1,10)
Che
atonQuotas
(10,1) (3,3)
OPEC MEMBER #1
OPEC
MEMBER
#2
All members have anincent ive to cheat ,
even t hough theywould all be bett er
off st icking to quotas
The bestoutcome for
the group as a
whole, but hardto achieve. . .
Given the chance thatother members might
cheat, and the non-cheater could end up
in his worst casescenario, all membershave an incentive to
cheat themselves
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Agenda
Page
Oil & Gas Basics_20061020_book
References, Websites and Data Releases to Watch
Natural Gas Specif ics
Whats the Story This Year?
The Big Picture: Macro Oil Fundamentals
Oil Specifics
24
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Short - to medium-term drivers for the oil market
Ongoing oil buying interest from consumersand investors
Iran noise; major Nigerian disruptions
Call on OPEC crude still topping 30 millionb/ d in 2007
OPEC showing commitment to a $50-55basket price
Comfortable oil inventories
Hurricane season less eventful than expected?Warm weather this winter t o follow?
Global oil demand growth moderating; slowereconomic growth ahead
Downstream investment should start to hitthe market in 2007-08
Reassessment of investors commodit iesallocations down the road as returns falterand interest rates rise?
Current JPMorgan Price ForecastsCurrent JPMorgan Price Forecasts
2006 crude forecasts as of May 2, 2006, 2007 crude forecasts as of Aug. 9, 2006.Natural gas forecast as of March 2, 2006 *Actual to date prices as of October 6, 2006
Note: All values are period averages. WTI & Brent in $/bbl; natural gas in $/MMBtuSource: JPMorgan Energy Strategy
1Q06 2Q06 3Q06 4Q06 2005 2006 2007
WTI Forecast 65.00 67.39 64.05
WTI Actual* 63.48 70.72 70.60 59.90 56.70
Brent Forecast 64.00 67.05 63.05
Brent Actual* 62.71 70.43 71.00 59.78 55.25
Natural Gas Forecast 7.67 7.32 7.50
Natural Gas Actual 7.84 6.65 6.18 6.02 9.02
Crude Oil Pri ce History, Forwards & Forecast RangeCrude Oil Pri ce History, Forwards & Forecast Range
US$/bbl
$0
$20
$40
$60
$80
$100
'95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13
JPM Probable RangeJPM Possible Range
HistoryForward CurveJPM Forecast
Source: JPMorgan Energy Strategy
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The crude oil market today
Crude Oil Pr ice History & ForwardsCrude Oil Pr ice History & Forwards
$5
$15
$25
$35
$45
$55
$65
$75
1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
WTI Brent
In US$/bbl
Source: JPMorgan Energy Strategy
$0
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This has been a refined products driven market
Heating Oil Crack + ForwardsHeating Oil Crack + Forwards Gasoline Crack + ForwardsGasoline Crack + Forwards
US$/bbl
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
'95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10
Heat Crack Fwds
Heat Crack
Source: JPMorgan Energy Strategy
US$/bbl
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
'95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10
Gasoline Crack
Gasoline Crack Fw ds
Source: JPMorgan Energy Strategy
Alt hough demand growth has moderated, we don t think the products story is over yet. Newref inery capacity addit ions wil l pressure these market s by 20072008, but not yet this year. Specchanges in the US will be support ive psychologically if not physically
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Commercial oil inventories Crude levels remain healthy
Total OECD Commercial Inventor iesTotal OECD Commercial Inventor ies A 7 mil lion bbl build in refined product
inventories offset a 7 mb draw from crude.
The level of crude remains much more
comfortable than the level of refined
product stocks
Regionally in August , builds in the US and
Japan offset draws in Europe and other
areas
In days of demand cover
48
50
52
54
56
58
60
Jun-99 Jun-00 Jun-01 Jun-02 Jun-03 Jun-04 Jun-05 Jun-06
Winter Summer Linear Trend
Source: JPMorgan Energy Strategy, IEA, Govn't & industry sources
0
Total OECD Crude Invent oriesTotal OECD Crude Invent ories Total OECD Product InventoriesTotal OECD Product Inventories
In billion bbl In billion bbl
0.90
0.95
1.00
1.05
1.10
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Five-Year RangeFive-Year Average20052006
Note: Latest month is to-date only , not full-month projection
Source: JPMorgan Energy Strategy, IEA, Govn't & industry sources
1.44
1.49
1.54
1.59
1.64
1.69
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Five-Year RangeFive-Year Average20052006
Note: Latest month is to-date only , not full-month projection
Source: JPMorgan Energy Strategy, IEA, Govn't & industry sources
0.00 0.00
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Hurr icanes hammer US Gulf ref ineries
Hurricane Impacts in PerspectiveHurr icane Impacts in Perspective
Roughly a quart er of US ref ining capacit y was off line at peak during last year s unprecedented hurricane season.Much of the hurricane-affected capacit y had normalized by early 2006 with a few major except ions
As of May 3, 325,000 b/ d, or 22%, of Gulf of Mexico oil product ion remains offline, according to MMS report ing
Gulf of Mexico Crude Shut In (in mbd) In US$
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
28-Aug-05 27-Sep-05 27-Oct-05 26-Nov-05 26-Dec-05 25-Jan-06 24-Feb-06 26-Mar-06 25-Apr-06 25-May-06
$(5)
$-
$5
$10
$15
$20
$25
$30
$35
Source: JPMorgan Energy Strategy, EIA, government and country sources
Actual Refinery Loss Minus Gulf of Mexico Crude Shut InProjected Refinery Loss Minus Gulf of Mexico Crude Shut In
Gasoline CrackHeating Oil Crack
Gasoline Crack FwdNYMEX Heating Oil Crack Fwd
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US refinery maintenance: Looking ahead to the fall
While the US planned refinery maintenance program for October looks to be heavier this year
than last year, unplanned outages are minimal compared to 2005. Planned maintenance is set
to average 798 kbd off line in October, compared to 527 kbd off line in October of last year.
Unplanned outages of several hundred thousand barrels for October 2006 compared to more
than 2 mil lion b/ d lost in October 2005
US Planned & Unplanned Refinery Shut downsUS Planned & Unplanned Refinery Shut downs
Average Offline Capacity Per Month (in million b/d)
0.0
0.3
0.6
0.9
1.2
1.5
1.8
2.1
2.4
2.7
Mar-02 Jul-02 Nov-02 Mar-03 Jul-03 Nov-03 Mar-04 Jul-04 Nov-04 Mar-05 Jul-05 Nov-05 Mar-06 Jul-06 Nov-06
Unplanned
PADD I (East Coast)
PADD II (Midwest)
PADD III (Gulf)
PADD IV (Rockies )
PADD V (West Coast)
Source: JPMorgan Energy Strategy, IIR
Hurricane
Katrina & Rita
Hurricane
Ivan
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Gasoline: An easier problem to solve in the At lant ic Basin
Net Gasoline Balances By RegionNet Gasoline Balances By Region Net Gasoil Balances By RegionNet Gasoil Balances By Region
Regional pr oduction minus regional consumption (in kbd)
-600
-500
-400
-300
-200
-100
0
100
200
300
400
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Asia
Europe
North America
Total OECD
Source: JPMorgan Energy Strategy, IEA
Regional production minus regional consumption ( in kbd)
-1,000
-800
-600
-400
-200
0
200
400
600
800
1,000
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
OECD Asia
OECD Europe
OECD North America
Total OECD
Source: JPMorgan Energy Strategy, IEA
Europe has always been st ructural ly long gasoline but has become more so as vehicle demand shif tsto diesel. The At lant ic Basin is now long gasoline. . .but short er and short er dist il late
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Changes to diesel specs: Lower sulfur limits to challenge supply chain
Changes to Diesel Sulfur Limi tsChanges to Diesel Sulfur Limi ts The US diesel sulf ur l imi t drops by 97%this
year to 15 ppm
US ref iners were required to meet the new
standard by June 1; pipeline operators must
meet the 15 ppm limit by Sept. 1; retailers
must offer 15 ppm by Oct . 15
Dramatic changes to diesel standards
underscore the challenge of not only making
the fuel but also dist ribut ing it to customers.
While US refiners have successfully ramped
up ULSD production and inventories of the
new spec have climbed steadily, there arestill logistical challenges associated with the
storage and t ransport of the cleaner fuel
Ultra-low sulfur diesel is so much cleaner
than others in the dist il late family (heating
oil, j et, kerosene) that operators wil l be
challenged in how t hey batch/ order t he fuels
in the pipe. Test flows have shown that the
sulfur in ULSD will have to be far
lower/ cleaner in order to deliver fuel at the
government-set limit to consumers. Separate
storage tanks wil l also be required for
distribut ion of ULSD
* Implemented in Beij ing July 2005 ahead of 2008 Olympics; t o be enforced nat ionwide 2010
** Implemented in major ci ti es in 2005; to be enforced nationwide in 2010Source: JPMorgan Energy St rat egy, government & press report s
In ppm 2003 2004 2005 2006 2007 2009 2010
US 500 15
Europe 500 350 50 10
Canada 500 15
China* 500 350
India** 2,500 500 350 50
Brazil 5,000 2,000 500 50
Japan 50 10
S Korea 430 30 10
US Diesel Inventor ies By Sulfur ContentUS Diesel Inventor ies By Sulfur Content
Million bbl
0
20
40
60
80
F eb'05 Apr'05 Jun'05 Aug'05 O ct'05 Dec '05 F eb'06 Apr'06 Jun'06 Aug'06
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Changes to gasoline specs: Sulfur limits and oxygenate requirements
Changes to Gasoline Sulfur Limi tsChanges to Gasoline Sulfur Limi ts
* Implemented i n Beij ing July 2005 ahead of 2008 Olympics; t o be enforcednationwide 2010
** Implemented in major ci ti es in 2005; to be enforced nationwide in 2010Source: JPMorgan Energy St rategy, government & press report s
RFG Inventor ies vs. RBOB/Alcohol StocksRFG Inventor ies vs. RBOB/Alcohol Stocks
Major US gasoline spec changes slated for 2006: lower sulfur content limit and theelimination of the oxygen content standard, which will impact MTBE use
While market concern, over the what is in effect an MTBE phase-out, has beendramat ic, t hese worries are overdone. We are experiencing some hiccups alongthe supply chain during the present t ransit ion period, but these should workthemselves out as the US has proven itself to be quite capable of blendingcomponents up to standard
In ppm 2004 2005 2006 2008 2009
European Union 150 50 10
US 120 90 30
China* 500 150
India** 500 150
Japan 50 10
South Korea 130 50
Brazil** 400 80
In million bbl
5
10
15
20
25
30
35
Jul-04 Oct-04 Jan-05 Apr-05 Jul-05 Oct-05 Jan-06 Apr-06
Finished RF G RBOB w/ Alcohol
Source: JPMorgan Energy Strategy, EIA
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Phasing out MTBE. . . phasing in ethanol
2005 US Energy Policy Act eliminated the nat ional oxygen content standard in
gasoline while not explicitly banning MTBE it effectively phases out the
gasoline addit ive MTBE and phases in the use of renewable fuels
MTBE has been found to contaminate groundwater, opening up MTBE-makers
up to lawsuits
Most of the industry are using ethanol because it replaces octane and clean-
burning propert ies of MTBE and it is in compliance with renewable fuel standard
Because of ethanol s af f init y to water, it cannot be t ransport ed by pipelineafter mixing with gasoline
Reformulated gasoline for oxygenate blending (RBOB) is blended with ethanol
in the tank, af ter it has been t ransport ed separately by pipe
States such as New York and California have already successfully phased out
MTBE in favor of ethanol
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Short - to medium-term drivers for the oil market
Bullish
Ongoing oil buying interest from
consumers and investors
Iran noise; maj or Nigerian disruptions
Call on OPEC crude st il l topping 30
mil lion b/ d in 2007
OPEC showing commitment to a$50-55 basket price
Bearish
Comfortable oil inventories
Hurricane season less eventful than
expected. Warm weather this winter
to follow?
Global oil demand growth
moderating; slower economic growth
ahead
Downstream investment should start
to hit the market in 2007-08
Reassessment of investorscommodities allocations down the
road as returns falter and interest
rates rise?
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Mean reversion (at least to the $20) is out the window
Front-month NYMEX West Texas Intermediate wi th Snapshot in Time Future Str ipsFront-month NYMEX West Texas Intermediate wi th Snapshot in Time Future Str ips
We are now assuming a new long-t erm average of $40
In US$/bb l
$-
$10
$20
$30
$40
$50
$60
$70
$80
'94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07
Source: JPM organ Energy Strategy
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Today s crude curve: Contango in the front , backwardat ion further out
West Texas Intermediate CurveWest Texas Intermediate Curve
In US$/bb l
$56
$58
$60
$62
$64
$66
$68
$70
Nov06 May07 Nov07 May08 Nov08 May09 Nov09 May10 Nov10 May11 Nov11 May12 Nov12
Source: JPM organ Energy Strategy
$0
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A new paradigm contango at $70!
WTI Flat Price vs. Backwardation (in US$/bbl)WTI Flat Price vs. Backwardation (in US$/bbl)
We see contango as sustainable at these price levels. However, a compell ing move lower (sub $50)could see backwardation return
$(2)
$(1)
$-
$1
$2
$3
$4
'86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06
$(5)
$5
$15
$25
$35
$45
$55
$65
$75
Source: JPMorgan Energy Strategy
M01-M02 NYMEX WTI M01 NYMEX WTI
Backwardation
Contango
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WTI backwardat ion vs. f lat pr ice
WTI Backwardation vs. Flat PriceWTI Backwardation vs. Flat Price
Source: JPMorgan Energy St rat egy
We see contango as sustainable at these price levels. However, a compell ing move lower (sub $50)could see backwardation return
M01 NYMEX WTI (in US$/bbl)
$-
$10
$20
$30
$40
$50
$60
$70
$80
$90
$(8) $(6) $(4) $(2) $- $2 $4 $6 $8 $10 $12
M02-M24 NYMEX WTI (US$/bbl)
1996-2002 2004-present 10/13/2006
$0
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Medium-t erm drivers of oil price have not gone away yet
Key fundamental drivers have supported oil prices in recent years that are
st il l wit h us today
For the past several years, we have seen a refined products-led market.
In other words, as much as crude oil prices have increased, prices for refined
products such as gasoline and diesel have gone up even more
This had been in large part a demand story. Demand growth has been strong
particularly in 2004, and particularly in the US and non-OECD Asia. Importantly,
demand growth is disproportionately for light-end products, notably diesel, which
is a type of distillate
The oil indust ry cycles through periods of over- and under-investment. Refining
and distribution (e.g. pipelines, tankers, terminals) are particularly pronounced
examples of how years of under-investment due to poor margins can lead to
capacity constraints down the road
While under-investment in ref ining and dist ribut ion is not a permanent market
feature, i t is also not a driver that can be reversed overnight. We see t ight
downstream capacit y inf luencing price until at least 200708, unless demand
growth falters signif icantly
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Is the demand story over?
Histor ical Oil Demand GrowthHistor ical Oil Demand Growth
Source: JPMorgan Energy St rat egy
Demand growth has moderated relative to 2004. We see this trend continuing for thebalance of the year
%yoy, 3 month rolling average
-5%
0%
5%
10%
15%
20%
25%
30%
Apr-98 Mar-99 Feb-00 Jan-01 Dec-01 Nov-02 Oct-03 Sep-04 Aug-05 Jul-06 Jun-07
OECD Dem and G rowth/Contrac tion Non-OECD Dem and G rowth/Contrac tion OECD Projec t
Non-OECD Project Global Demand Growth Historical Average Rate of Global Growth
World Project
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Light -end products dominate global oil demand growth
Global Oil Demand Growt h by Major ProductGlobal Oil Demand Growt h by Major Product
Dieselization and tightening global fuel specs will continue to dictate the global oil demandgrowt h profile we see this t rend cont inuing even as total demand growth eases
In kbd
-500
250
1,000
1,750
2,500
3,250
2000 2001 2002 2003 2004 2005
Gasoline Distillate Jet/Kero Fuel Oil Heavy Light
Source: JPMorgan Energy Strategy, IEA, government & industry sources
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Energy intensity in emerging economic powers moderates as they grow
Energy Intensity/GDP China & JapanEnergy Intensity/GDP China & Japan
Oil bbl co nsumed pe r US$1,000 GDP
0
1
2
3
4
5
6
7
8
0 1,000 2,000 3,000 4,000 5,000
GDP (in billion current US$)
Japan China
Source: JPMorgan Energy Strategy, BP Statistical Handbook
Find from same publi cat ion (above)
Energy Intensit y Declines As GDP IncreasesEnergy Intensit y Declines As GDP Increases
0
1
2
3
4
5
6
7
8
9
250 5,250 10,250 15,250 20,250 25,250
GDP (in billion current US$)
OECD Non-OECD
Oil bbl co nsumed p er US$1,000 GDP
Source: JPMorgan Energy Strategy, BP Statistical Handbook
Chinese oil demand growth wil l cont inue to be signif icant to the global balance, especiall y in thelead-up to the Beij ing Olympics. But the energy intensit y to growth rat io does moderate ascountr ies get richer
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The cycle of investment
OECD Oil Demand vs. Ref inery Capacit yOECD Oil Demand vs. Ref inery Capacit y
In million b/d
20
25
30
35
40
45
50
55
'83 '85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05
Refined Products Import Gap
Refinery Capacity
Oil Demand
Source: JPM Energy Strategy , IEA, EIA
Downstream investment, or lack
thereof, is cyclical and tends to over-
shoot in both directions
Theres no reason to think that this
investment cycle wont eventually be the same
OECD demand exceeds OECD refinery
capacity. That means that, increasingly,
spare ref inery capacit y is in the non-OECD. That means that j ust like
crude production most of t he worlds
refined products production is
geographically far away from most of
the world s consumpt ion0
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Energy inf rast ructure/dist r ibut ion capacit y is st i ll a const raint
Global Oil Demand Supplied By International TradeGlobal Oil Demand Supplied By International Trade
More refined products, in part icular, have to t ravel greater distances to their end user. Port s,pipes, tankers, etc. are all an issue will they see the investment boom that refining is seeing?
Oil Trade:Oil Demand
30%
35%
40%
45%
50%
55%
60%
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
1985-89: 44%
1990-94: 51%
1995-99: 55%
2000-04: 58%
Source: JPMorgan Energy Strategy, BP Statistical Handbook
Crude Refined Products
1987-1995 3.6% 1.8%1996-2005 2.5% 3.8%
2001-2005 1.7% 5.4%
Grow th In Waterbor ne
Crude & Products Transpor t
Source: Clarkson's Shippi ng Review
0%
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N OPEC d ti h di i t d i t
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Non-OPEC production has disappointed in recent years
Histor ical Oil Supply GrowthHistor ical Oil Supply Growth
%yoy, 3 month rolling average
-10%
-5%
0%
5%
10%
15%
20%
25%
Mar-98 Jul-99 Nov-00 Mar-02 Jul-03 Nov-04 Mar-06 Jul-07
OPEC Supply Growth/Contrac tion Non-O PEC Supply G rowth/Contrac tionGlobal Supply Growth Historical Average Rate of Global Growth
Source: JPMorgan Energy Strategy, IEA
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OPEC sails through t hree bull years
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OPEC sails through t hree bull years
OPEC Crude Production & Group QuotaOPEC Crude Production & Group Quota
OPEC s market relevance has waned. The group hasn t had to cut production or show anydiscipline since March 2004
In million b/d
20
21
22
23
24
25
26
27
28
29
Oct-02 Mar-03 Aug-03 Jan-04 Jun-04 Nov-04 Apr-05 Sep-05 Feb-06 Jul-06
OPEC-10 Wellhead
Production of Crude
Quota
Source: JPM organ Energy Strategy, IEA
0
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Sliding OPEC spare capacit y but capacity addit ions in t he pipeline
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Sliding OPEC spare capacit y, but capacity addit ions in t he pipeline
OPEC Spare Capacity vs. PriceOPEC Spare Capacity vs. PriceExpected Additions toOPEC Capacity* (in kbd)
Expected Additions toOPEC Capacity* (in kbd)
* Excluding declinesNote: This is not a complete list and is subject to changeSource: JPMorgan Energy Strategy, government
reports, media reports
In kbd
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
Aug-97 Feb-99 Aug-00 Feb-02 Aug-03 Feb-05 Aug-06
$-
$10
$20
$30
$40
$50
$60
$70
$80Spare Capacity Nymex WTI Price
Source: JPMorgan Energy Strategy
US$/bbl 2006Saudi Arabia 300
Iran 160
Nigeria 265
Algeria 50
Venezuela 75Libya 150
UAE 200
2007
Saudi Arabia 500
Nigeria 220
Algeria 140
2008Saudi Arabia 300
Nigeria 1,130
Indonesia 180
2009-2010
Saudi Arabia 1,200
Algeria 100
Qatar 525
2006 1,200
2007 860
2008 1,610
2009-2010 1,825
2006-2010 Total 5,495
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Top geopoli t ical hotspots: No st rangers to disrupt ions
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Top geopoli t ical hotspots: No st rangers to disrupt ions
In million b/d
0
1
23
4
5
6
'67 '69 '71 '73 '75 '77 '79 '81 '83 '85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05
Source: JPM organ Energy Strategy, BP Statistical Handbook
Iranian
Revolution
In million b/d
0
1
2
3
4
'67 '69 '71 '73 '75 '77 '79 '81 '83 '85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05
Source: JPM organ Energy Strategy, BP Statistical Handbook
Iran-Iraq
War
Gulf War I
Gulf War II
In million b/d
0
1
2
3
'79 '81 '83 '85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05
Source: JPM organ Energy Strategy, BP Statistical Handbook
Strike cripples
production
NigeriaNigeria
IranIran
VenezuelaVenezuela
IraqIraq
In million b/d
0
1
2
3
4
'67 '69 '71 '73 '75 '77 '79 '81 '83 '85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05
Source: JPM organ Energy Strategy, BP Statistical Handbook
Strike cripples
production
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Oil production: An inherent ly r isky business
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Oil production: An inherent ly r isky business
OECD Reserves as % of GlobalOECD Reserves as % of Global
More and more of t he world s remaining oil reserves are in geopoli t ically risky part s of t he world,and that s not going to change
OECD Reserves: Global Reserves
0%
5%
10%
15%
20%
25%
'81 '83 '85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05
Source: JPMorgan Energy Strategy, BP Statistical Handbook
Oil Reserves by Risk of LocationOil Reserves by Risk of Location
0
50
100
150
200
250
300
350
400
450
500
0-1 1-2 2-3 3-4 4-5 5-6 6-7 7-8 8-9 9-10
Average of Country Risk Rating & Corruptionion Perception Index
(0 = highest risk/most corrupt)
Total Reserves (in '000 billion bb l)
Source: JPMorgan Energy Strategy, BP Statistical Handbook, Transparency International, UNCTAD
5 = 329
More corrupt / r isky Less corrupt / r isky
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US oil dependency on the r ise
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US oil dependency on the r ise
US Oil Demand as % of Total US Energy DemandUS Oil Demand as % of Total US Energy Demand
Poli t ical rhetoric aside, oi l s share of US energy consumption is rising, the share of renewables hasfallen slightly in each of the past 2 decades
US Oil Demand by Source (2004)US Oil Demand by Source (2004)
35%
37%
39%
41%
43%
45%
47%
49%
'50 '55 '60 '65 '70 '75 '80 '85 '90 '95 '00 '05
Source: JPMorgan Energy Strategy, EIA
Coal, 23%Nuclear, 8%
Petroleum,40%
Natural Gas,23%
Renewable,
6%
Source: JPMorgan Energy Strategy, EIA
0%
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US reliance on oil imports also on the rise
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US reliance on oil imports also on the rise
US Net Oil Imports As % Of Total US Oil DemandUS Net Oil Imports As % Of Total US Oil Demand
Foreign oil supplies are an ever growing percent of US demand. OPEC members supply j ust lessthan half of total US net oil imports and Middle East Gulf produces supply 20%
US Net Oil Imports By SourceUS Net Oil Imports By Source
0%
10%
20%
30%
40%
50%
60%
70%
'60 '63 '66 '69 '72 '75 '78 '81 '84 '87 '90 '93 '96 '99 '02 '05
Total Oil Imports, All Sources
From Mide ast Gulf
From OPEC Members
Source: JPMorgan Energ y Strategy, EIA
Other Non-
Opec, 28%Other Opec,
4%
Mexico, 12%Canada,
16%
UK, 3%
Venezuela,
11%
Nigeria, 8%
Mideast Gulf,
17%
Source: JPMorgan Energy Strategy, EIA
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Agenda
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Agenda
Page
References, Websites and Data Releases to Watch
Natural Gas Specifics
What s the Story This Year?
The Big Picture: Macro Oil Fundamentals
Oil Specifics
54
2
13
24
54
62
OIL
&
GAS
BASICS
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g
Natural gas is a regional commodity, whereas oil is a global commodity
In other words, oil is fungible in a way that gas is not
Why? The physical propert ies of natural gas make it harder t o transport ,part icularly inter-cont inentally. Most natural gas is t ransported in gaseous
form via pipeline. This means that the US gas market is effectively a
closed system
For this reason, regional gas markets are unrelated. For example, t he UK
gas market has no relationship to the US gas market . In fact, European
natural gas is priced using an oil-referenced formula
The widespread adopt ion of liquefied natural gas (LNG) when and if ithappens will change the gas market from a regional market to a global
market. In other words, the development of LNG will make the gas
market look more like the oil market
55NATURAL
GAS
SPEC
IFICS
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The US natural gas market
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g
Natural gas is transported in the U.S. through pipelines to different locations called Hubs
Hubs are market places where the physical commodity can be bought and sold. Dif ferent
market places have different prices due to different supply and demand factors
Henry Hub is the most liquid physical natural gas market, because Henry Hub is where
futures contracts are sett led for the physical commodit y. It is the market which is most
closely represented by the NYMEX futures curve
Producers and consumers of natural gas have incentives to not only hedge their physical
commodity exposure using futures contracts, but also to hedge the location (basis) risk
associated with dealing in different markets across United States, Canada and Mexico
The basis market provides this added hedging ability
In the basis market hub locations trade at a differential to NYMEX futures contracts on a
forward basis
Hence leading to the abil ity to buy the NYMEX +/ the appropriate basis dif ferentialforward to hedge a future sale of the physical commodity
Some of the most frequently quoted basis markets are: the Rocky Mountain region, the
Houston Ship Channel Hub, AECO (Canada), and t he Panhandle Hub
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Natural gas: How is it measured?
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In the Unit ed States, natural gas derives it s value from its Bri t ish thermal unit (Btu)
content, or heating capability
Bri t ish thermal unit : a unit of heat equal to about 252 calories; quantit y of heat required
to rise the temperature of one pound of water one degree Fahrenheit
Volumetrically natural gas is measured in cubic feet (cf) on a 24-hour flowing basis, and
consequent ly a standard conversion was adopted whereby 1 cf = 1,000 Btus, which allows
for natural gas to be bought and sold in terms of its Btu value
Useful gas conversions:Useful gas conversions:
1 MMbtu = 1 mil l ion Btus
1 Mcf 1 MMBtu, depending upon the purity of the gas
1 MMcf = 1,000 MMBtu
10 MMcf = 10,000 MMBtu = 1 NYMEX cont ract
1 Bcf = 1 bil lion cubic feet = 1,000,000 MMBtu
1 Tcf = 1 t ril lion cubic feet
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Maj or market drivers
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Weather is both a demand and supply factor
Summer storage inj ect ion season (AprilOctober) is influenced by cooling demand
Winter storage withdrawal season (NovemberMarch) is influenced by heating
demand
Shoulder Months (March, April, May and September, October, November) are less
weather sensitive
But hurricane disruptions most typically in the late-summer to fall can affect
the supply side of the balance
Drought conditions in areas that depend on hydropower for electricity generation
can also boost gas demand
Oil price is also a driver of gas price, because there is some degree of
substitutability between the two fuels
Liquefied Natural Gas (LNG) is a minor factor in the gas market now, but will
become increasingly import ant as the market develops. LNG will make the gas
market more global
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URAL
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The US needs LNG to meet growing gas demand
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The long-term gas price will depend heavily on LNG to fill the growing disconnect between demandfrom residential, commercial, industrial and power generation consumers and North Americansources of supply
The declining domest ic product ion scenario makes LNG vital t o satisfying projected US demandgrowth. . . or price wil l have to rat ion demand
In Tcf
500
700
900
1,100
1,300
1,500
1,700
1,900
2,100
2,300
2,500
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Lower-48 Production Canadian/Alaska Production Demand
Source: JPMorgan Energy Strategy, EIA
In Bcf/day
0
The growing US LNG supply gapThe growing US LNG supply gap
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URAL
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US LNG terminal capacity
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Imports by Terminal (Monthly)Imports by Terminal (Monthly)
In Bcf
0.0
0.5
1.01.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
Everett (MA) Lake Charles (LA) Cove Point (MD) Elba Island (GA) Gulf Gateway (Offshore)
Source: JPMorgan Energy Strategy, Waterborne LNG Report
Sustainable Capacit y
Right now, LNG supply is the limiting factor for the US, not spare terminal capacity.LNG imports to the US should ramp up from late 2007 when new supplies from Trinidadand the Middle East come online contracted to meet US demand, likely to pressure USgas prices
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Winter natural gas storage t raj ectories
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Wint er Gas Storage TrajectoriesWint er Gas Storage Trajectories
In Bcf
500
1,000
1,500
2,000
2,500
3,000
3,500
7-Oct 1-Nov 26-Nov 21-Dec 15-Jan 9-Feb 6-Mar 31-Mar 25-Apr 20-May 14-Jun 9-Jul 3-Aug 28-Aug 22-Sep
200001 200102 200203 200304 200405 200506
Source: JPMorgan Energy Strategy, EIA
0
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URAL
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Agenda
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Page
References, Websites and Data Releases to Watch
Natural Gas Specif ics
What s the Story This Year?
The Big Picture: Macro Oil Fundamentals
Oil Specifics
62
2
13
24
54
62
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Import ant data releases
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EIA Weekly Pet roleum Status Report (Wednesdays 10:30 AM)
EIA Weekly Natural Gas Storage Report (Thursday 10:30 AM)
EIA Petroleum Supply Monthly Report (end of month)
EIA Short Term Energy Out looks (beginning of month)
IEA monthly Oil Market Report (~10th of the month)
Euroilstock inventory report (~10th of the month)
CFTC Commit ment of Traders report (Fridays)
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ERENCES,
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Key websites
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US Department of Energy, Energy information Administration
www.eia.doe.gov
Organizat ion of Petroleum Export ing Countries
www.opec.org
BP s Statist ical Review of World Energy
www.bp.com
New York Mercant ile Exchange
www.nymex.com
Commodity Futures Trading Commission
www.cftc.govInternat ional Energy Agency
www.iea.org
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Bloomberg codes
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Prices:Prices: News & Info:News & Info:
Main energy page NRG
EIA inventory data DOE
Global crude oil prices CRUD
Exchange menu CEM
Nymex WTI crude CL1 [cmdty]
Nymex heat ing oil HO1 [cmdty]
Nymex gasoline HU1 [cmdty]
Nymex natural gas NG1 [cmdty]
IPE Brent crude CO1 [cmdty]
IPE gasoil QS1 [cmdty]
Cash values for refined products USPD
EUPD
FEPD
Top energy pages OTOP
ETOP
TGAS
All energy news NI NRG
Oil news NI OIL
Gas news NI GAS
Power news NI ELC
Refinery news NI REF
OPEC NI OPEC
Energy glossary REFG
Keeping t ime IC
Calendars CDR
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Reuters codes
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Prices:Prices: News & Info:News & Info:
Main energy page Q: ENERGY
EIA inventory data Q: EIAA
Nymex WTI crude Q: CLc1
Nymex heat ing oil Q: HOc1
Nymex gasoline Q: HUc1
Nymex natural gas Q: NGc1
IPE Brent crude Q: LCOc1
IPE gasoil Q: LGOc1
Cash values for Q: PRODUCT/ 1refined products
Energy highlights Q: nTOPO or TOP/ O
Link to energy codes O/ CODES
All energy news O
Oil news OIL
Gas news NGS
OPEC news OPEC
EIA inventory report EIA/ S
US refinery news REF/ US
Energy glossary ENERGY/ 3
66REF
ERENCES,
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Basic oil conversions
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42 gallons = 1 barrel
159 li ters = 1 barrel
7.33 barrels of crude = 1 ton
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