The ATS Reportatsenergy.com/sample_ats_report/arTuesday.pdf · resurgence of NYMEX crude price is somewhat baffling. The NYMEX front month crude closed up $1.23 at $99.37 and is up

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Volume 23, Issue 225 The ATS Report Tuesday, Nov 15, 2011

“The Petroleum Industry’s Analyst Since 1988”

Inside The ATS Report Today Futures Exchange Activities 1 Technical Analysis - Oil Related 3 Asia Desk 23 Technical Analysis - Oil & Gas 2 Market Commentary 4

Crude Oil & Natural Gas

WTI WTI Brent Brent Oman Nat Gas Nat Gas Month DEC JAN DEC JAN JAN DEC JAN Basis $/BBL $/BBL $/BBL $/BBL $/BBL $/MMBTU $/MMBTU Settle 99.37 99.43 112.39 112.18 111.45 3.404 3.542

Change 1.23 1.21 0.50 0.90 1.50 -0.054 -0.058 Open 98.04 98.11 112.03 111.36 111.29 3.445 3.586 High 99.84 99.86 113.14 112.70 111.90 3.483 3.613 Low 97.51 97.61 111.62 111.05 110.86 3.390 3.529

Resist 9959, 10060+/- N/A N/A 3500-3509, 3558, 3614* Support 9698, 9655*, 9425-9324* N/A N/A 3330-3212

Refined Products RBOB RBOB HO HO Gas Oil Gas Oil Ethanol

Month DEC JAN DEC JAN DEC JAN DEC Basis $/GAL $/GAL $/GAL $/GAL $/TON $/TON $/GAL Settle 2.5857 2.5921 3.1713 3.1740 993.75 984.00 2.6800

Change 0.0504 0.0497 0.0091 0.0120 -5.50 -3.50 0.0280Open 2.5333 2.5374 3.1645 3.1675 994.00 982.50 2.6850 High 2.5985 2.6049 3.1925 3.1900 1001.50 990.25 2.6870 Low 2.5166 2.5292 3.1527 3.1557 990.75 981.00 2.6570

Resist 26022, 263?, 26569* 320+/-, 323+ N/A N/A Support 25464-45, 253, 250- 21477, 21330-312, 31118* N/A N/A



Technical Analysis - Oil & Gas

DEC CRUDE OIL - SHORT TERM TREND IS UP (9938) OBJ: NONE

Resist: 9959, 10060+/- Supprt: 9698, 9655*, 9425-9324* TRP: 93.24 Comment: The market is bullish, but rallies are testing weekly resistance around 9959*. Closes over 9960

and 10060 alert for a larger blow off drive. However, be on guard for a rejection from 9959*+ that will suggest a possible short term peak. A close under 9655* calls for setbacks to test 9324* for a topping turnover.

DEC HEATING OIL - SHORT TERM TREND IS UP (31758) OBJ: NONE

Resist: 320+/-, 323+ Supprt: 21477, 21330-312, 31118* TRP: 305.76 Comment: The market is bullish, but the rally is stalling up around the 31775 target. Closes over 319 and 32323 are needed to spark another bull wave.

Further struggles to reach past 319 should put us on guard for a back off to correct the recent bull wave. A close under 31118* alerts for a near term reversal and reactionary drop to test 30576* for a topping turnover.

DEC RBOB - SHORT TERM TREND IS DOWN (25917) OBJ: 24655?

Resist: 26022, 263?, 26569* Supprt: 25464-45, 253, 250- TRP: 265.69 Comment: The market remains short term bearish and could drop to test back into previous swing low support from previous months under 250-.

A close under 250 implies declines to probe at 246-. We may again see corrective action today, but rallies contained under Monday's range will keep the pattern negative. Also, only a close over 26569* will trigger a reversal to the upside.

DEC NATURAL GAS - SHORT TERM TREND IS DOWN (3409) OBJ: 3330

Resist: 3500-3509, 3558, 3614* Supprt: 3330-3212 TRP: 37.56 Comment: The market is bearish, staging an accelerating selloff and favors continued pressing declines that could wash against a previous

monthly swing low at 3330-3212. Any rebounds should struggle to push back through Monday's gap which in turn will encourage selloffs. A close over 3614* is needed to prompt a few rebounding days and possibly test 3756* resistance for a bottoming turn.

Technical Analysis By Global Research & Investments LLC 259 MIDDAUGH RD. CLARENDON HILLS, IL 60514 USA PHONE/FAX: (630) 986-8683 EMAIL: [email protected] www.gri2.com



Technical Analysis – Oil Related Financial Instruments & Commodities

DEC US DOLLAR - SHORT TERM TREND IS SDWYS/DOWN (7810) OBJ: NONE

Resist: 7830*, 7872, 7915-7932 Supprt: 7757, 7702*-76925, 76675- TRP: 78.30 Comment: The market is trying to rally, but may yet be capped against the 7830* resistance. A close over

7830* is needed to signal a stronger upturn for rallies to reach for 7900-7950. A pullback from 7830* suggests a roll off back through flagging consolidation. A close under 7702* signals a reversal turn to help drive selloffs against 7622* support.

DEC GOLD - SHORT TERM TREND IS UP (178380) OBJ: 184450?

Resist: 1792-1797, 1803-1808 Supprt: 176540, 1745-1743, 172810* TRP: 1728.10 Comment: In general the market is still bullish, but rallies have been stopped against previous downturn levels / resistance associated with the 1789-1808

area. A close over 1803 is needed to extend rallies to 184450. The blunted advance against 1803+ alerts for a possible swing high. Look for further pullbacks with a drop under last Thursday's low propelling declines to attack 172810* for a reversing turn into a sustained correction phase.

DEC SILVER - SHORT TERM TREND IS SDWYS/UP (34285) OBJ: NONE

Resist: 3500-3519, 3599 Supprt: 3376, 3305-3273, 32135* TRP: 3213.5 Comment: The market remains in a short term bull upturn. A surge back over recent weekly highs or close over 3515 should spark a bull leg reaching for

3700. Recent setbacks caution for additional flagging congestion. View sideways trade over 3305+ as a staging level to attempt further rallies. A roll off through 3305-3273 should drive selloffs to test 32135* support. A close under 32135* marks a lasting turn back to negative trade.

DEC COPPER - SHORT TERM TREND IS SDWYS/UP (35035) OBJ: NONE

Resist: 35375, 35850*-360 Supprt: 34425-342*, 339-33840 TRP: 330.55 Comment: The market is trying to rebound off 33055* support, but trade will need a pop over 360 or close over 35850* to rekindle bull forces. If trade

struggles in the 350's and rejected by 35850*, be ready for follow through selloffs. A slip under 33840 is negative. A close under 33055* is bearish and could add to selloffs into the low 320's. If trade holds 33840, then we may see bull flagging days.

DEC CORN - SHORT TERM TREND IS SDWYS/DOWN (645 1/2) OBJ: 622

Resist: 650-652 1/2*, 660+ Supprt: 637 3/4, 631 1/2, 622-618 TRP: 652.50 Comment: The market alerts for a peaking turn in the formation and leaves trade vulnerable to selloffs this

week. Sustained action under 631 1/2 will drive selloffs to 622-618. We may see modest corrections for additional sideways trade around 650+/- for a few days, but only a close over 652 1/2* triggers a flip back to bull trending trade.



Market Commentary

U.S. FINANCIAL MARKET TAKES BREAK TODAY; DOW UP 17 POINTS; REFINERY MARGINS DOWN AS GASOLINE CRACKS COLLAPSE

Tuesday, November 15, 2011: The DOW took a breather yesterday and today after recording triple digit moves the previous 3 days. Yesterday the DOW slipped 75 points and today the DOW inched up 17 points, closing at 12,096. For the week the DOW is down only 74 points, not too bad given the current situation in several of the Euro-zone countries. Today’s trading range was narrow, from a low of 12,001 to a high of 12,165. Reports of solid third quarter growth in France and Germany is ‘counter-balanced’ by fears that the debt crisis is likely to make matters worse as Italy, Greece, Ireland, Portugal and Spain have been forced to adopt tough austerity measures in order to stop the bond market from driving them to default. Even with such austerity measures, the yield on Italian 10-year bonds climbed above 7%, a level considered not sustainable and not far off the 14-year high of around 7.5% hit last week, before Prime Minister Silvio Berlusconi stepped down. The fear of bankruptcy by the named Euro-zone countries will continue to impact the financial markets with volatility the ‘norm.’ The extent that a bankruptcy of a Euro-zone country (or countries) would impact world financial markets is both unknown and frightening, with such failure likely leading to another financial meltdown. Given the current financial outlook, it’s difficult to see any overwhelming reason for optimism. In the face of economic uncertainty, the resurgence of NYMEX crude price is somewhat baffling. The NYMEX front month crude closed up $1.23 at $99.37 and is up $2.57 for the week. Since October 4th, the December NYMEX crude price is up $23.50 or 31.0%. The last

time the front month NYMEX crude price exceeded today’s closing was on July 26th when the front month NYMEX price closed at $99.59. The chart below reflects the front month NYMEX closing crude price from July 26th thru yesterday, November 14th.

Atlantic Basin Refinery Margins: From cob Monday, November 7th, through cob Monday, November 14th, all refinery margins pulled back as the plummeting gasoline crack more than offset the rising distillate cracks. The U.S. upper Mid-west refinery margin fell $10.36 as the gasoline crack plummeted $16. The U.S. Gulf Coast refinery margin was off $3.02 with the gasoline crack down $7.94 to a negative -$6.87, a new low for the 54 week period; the jet crack up $4.26; and the diesel crack up $4.38. The U.S. East Coast refinery margin fell $2.42 with the gasoline crack down $6.98 to a negative -$6.11, a new low for the 54 week period; the jet crack up $3.74; and the diesel crack up $4.05. The Rotterdam refinery margin was also down, slipping 90 cpb to $2.32 (after falling $3.49 last week to $3.22) with the gasoline crack falling $6.11 to a negative -$8.29, a new low for the 54 week period; the



jet crack up $4.55; the gas oil crack up $4.54; the lsfo crack up $1.03; and the hsfo crack up 94 cpb. Total crude oil and petroleum products inventory, including the SPR, was down for the

eleventh time in the past fourteen weeks, plummeting 15.343 million barrels to 1,745.352 million barrels and is now 124.77 million barrels under last year’s Sept 03 high of 1,870.122 million barrels.

Atlantic Basin Refinery Margin Trends: Basis Platts Prices

Oct 17 2011 $/Bbl

Oct 24 2011 $/Bbl

Oct 31 2011 $/Bbl

Nov 07 2011 $/Bbl

Nov 14 2011 $/Bbl

Nov 15 2010 $/Bbl

U.S. Gulf Coast Refinery Margin basis LLS

10.67

6.90

9.96

9.83

6.81

7.93

LLS Spot Price 112.95 116.48 111 45 115.79 113.02 88.30 USGC Mid-Unl. Crack 3.70 -1.69 0.14 1.07 -6.87 2.66 USGC Jet Crack 14.67 13.58 18.74 16.54 20.80 11.27 USGC ULSD Crack 12.57 11.04 15.86 14.53 18.91 9.61 Upper Midwest Refinery Margin basis WTI

33.42

28.38

25.85

28.69

18.33

11.12

WTI/Cushing Spot Price 86.35 91.33 92.85 95.79 98.12 84.60Chicago Mid-Unl. Crack 28.55 22.67 19.50 22.92 6.62 8.31Chicago Jet Crack 40.31 37.32 35.93 37.57 37.17 16.02Chicago ULSD Crack * 38.91 34.95 33.53 35.62 35.44 14.40U.S. East Coast Refinery Margin basis Nigerian Lt.

5.68

5.95

8.09

6.88

4.46

9.45

Bonny Lt. fob spot price 114.57 113.54 110.26 116.00 113.88 87.58New York RBOB Crack 1.70 -0.23 1.17 0.87 -6.11 9.28New York Jet Crack 12.11 16.39 19.43 16.73 20.47 12.93New York ULSD Crack 11.41 14.19 17.50 14.84 18.89 11.15Rotterdam Refinery Margin basis Dated Brent

5.57

5.27

6.71

3.22

2.32

5.82

Dated Brent Spot Prices 112.86 111.76 107.86 115.16 112.76 85.47Premium Unleaded FOB R-dam Barge Crack

2.54

0.75

0.10

-2.18

-8.29

5.47

ARA Jet Barge Crack 16.93 17.84 22.12 18.03 22.58 14.15ARA ULSD Barge Crack 21.64 23.54 26.64 20.95 25.49 15.67

* estimated

ATLANTIC BASIN MARKET – U.S. PRODUCT CRACKS U.S. Gasoline Cracks: From cob Monday, November 7th, through cob yesterday, the gasoline crack plummeted $16.30 in Chicago; fell $7.94 in the U.S. Gulf to a negative -$6.87, a new 12 month low; and dropped $6.98 in New York harbor to a negative -$6.11, a new 12 month low. The gasoline crack levels in the U.S. Gulf Coast and New York harbor remain at levels which are unacceptable to refiners. The

gasoline crack reported in the U.S. Gulf Coast is $9.53 lower than last year while the gasoline crack in New York harbor is $2.20 lower than last year. The Chicago gasoline crack is now lower than last year, but at an overly inflated and resulting distorted level because the reference crude price for the upper Midwest area (Chicago), <WTI>, continues significantly lower than its



historic relation to the other reference crudes.

Selected data on U.S. gasoline cracks from November 01, 2010 COB COB COB COB Difference $ per barrel

High Low Nov 15 2010

Dec 31 2010

Nov 07 2011

Nov 14 2011

11/14/11 less 11/15/10

Gulf Coast 30.86 -6.87 2.66 5.45 1.07 -6.87 -9.53 Chicago 49.05 5.27 8.31 11.29 22.92 6.62 -1.69 NY Harbor 27.70 -6.11 9.28 9.11 0.87 -6.11 -2.20

The following charts track the gasoline crack in the U.S Gulf and New York Harbor from November 01, 2010 thru Monday, November 14, 2011. Chicago is excluded because the crack is overly inflated and distorted because the reference crude price for the upper Midwest area (Chicago), <WTI>, continues significantly lower than its historic relation to the other reference crudes.

U.S. Low Sulfur Diesel Cracks: From cob Monday, November 7th, through cob yesterday, the diesel crack in Chicago slipped 18 cpb while the crack in the U.S. Gulf gained $4.38 to $18.91, a 54 week high, and the crack in New York harbor moved up $4.05 to $18.89, a 54 week high. The cracks in all locations are significantly higher than last year with the Chicago diesel crack continuing at an overly inflated and resulting distorted level because the reference crude price for the upper Midwest area (Chicago), <WTI>, continues significantly lower than its historic relation to the other reference crudes.

Selected data on U.S. low sulfur diesel cracks since November 01, 2010

COB COB COB COB Difference $ per barrel High Low Nov 15

2010 Dec 31 2010

Nov 07 2011

Nov 14 2011

11/14/11 less 11/15/10

Gulf Coast 18.91 5.09 9.61 7.28 14.53 18.91 +9.30 Chicago 41.14* 9.30* 14.40* 11.04* 35.62* 35.44* +21.04* NY Harbor 17.69 2.16 11.15 12.71 14.84 18.89 +7.74

*estimated



The following charts graphically summarize the low sulfur diesel crack in the U.S. Gulf and in New York harbor from November 01, 2010 thru Monday, November 14, 2011. Chicago is excluded as data for low sulfur diesel for that region became unavailable at the end of June, 2010 and because the crack is overly inflated and distorted because the reference crude price for the upper Midwest area (Chicago), <WTI>, continues significantly lower than its historic relation to the other reference crudes.

U.S. Jet Cracks: The following charts include data for the jet/kerosene cracks in the U.S. Gulf Coast and in New York harbor from November 01, 2010 thru Monday November 14, 2011.

After hitting a new 12 month high of $20.82 on Wednesday, August 24th, the USGC jet crack plummeted $12.45 through September 12th, closing at $8.37 and for the week ending Monday, September 19th, the U.S. Gulf jet crack recovered slightly, increasing $1.83 to $10.20. Since then the U.S. Gulf jet crack has trended up, hitting a ‘post August 24th high’ of $20.80, yesterday, November 14th.

Since hitting the twelve month low of $9.27 on September 21st, the New York harbor jet crack has been trending up, and was up $3.74 for the week ending yesterday, November 14th, $11.20 higher than the September 21st low. The New York harbor jet crack hit its 12 month high of $25.95 on Thursday, March 17, 2011.



Atlantic Basin Market - Northwest Europe Products and Cracks: From cob Tuesday, November 8th thru cob today, November 15th the gasoline crack retreated, falling $2.81 for the week but up $2.10 today to a negative -$6.19. The jet crack fell $1.02 today but is up $2.94 for the week closing at $21.56 today, slipping below yesterday’s 54 week high of $22.58. The gas oil crack slipped 41 cpb today but is up $4.10 for the week, closing at $25.08 today, slipping below yesterday’s 54 week high of $25.49. The LSFO crack inched up 20 cpb today and is up 89 cpb from last Tuesday’s close to a negative -$6.56, while the HSFO

crack gained 79 cpb for the day and was up $2.01 from last Tuesday’s close to a negative -$9.23. The LSFO crack remains far above its twelve month Jan 14, 2011 low of a negative -$17.05, and the HSFO crack remains far above the April 08, 2011 twelve month low of a negative -$23.48. With the exception of the gasoline crack, which is a depressing $13.76 lower than last year, all other cracks are higher, with some significantly higher: jet crack - $8.42 higher and gas oil crack $9.82 higher. The lsfo crack is $3.02 higher than last year and the hsfo crack is 97cpb higher.

Recent Data on Northwest Europe Cracks 2011

Product Cracks: $ per barrel

Oct 18

Oct 25

Nov 01

Nov 08

Nov 14

Nov 15

Gasoline * 2.20 -0.90 1.07 -3.38 -8.29 -6.19 Kero/Jet 17.86 18.26 21.42 18.62 22.58 21.56Gas Oil – 10 ppm 21.83 23.24 26.53 20.98 25.49 25.081.0% fuel oil (LSFO) -8.13 -9.74 -6.39 -7.45 -6.76 -6.56 3.5% fuel oil (HSFO) -10.63 -11.21 -8.63 -11.24 -10.02 -9.23

* Prem Unl fob R-dam barges

Selected data on Northwest Europe cracks since October 01, 2010 COB COB COB COB Difference $ per barrel

High Low Nov 15 2010

Dec 31 2010

Nov 07 2011

Nov 14 2011

11/14/11 less 11/15/10

Gasoline 15.63 -8.29 5.47 5.15 -2.18 -8.29 -13.76 Jet Fuel 22.58 11.45 14.15 13.59 18.03 22.58 +8.43 Gas Oil 26.64 11.99 15.67 12.46 20.95 25.49 +9.82 LSFO -3.53 -17.05 -9.78 -15.60 -7.79 -6.76 +3.02 HSFO -8.09 -23.48 -10.99 -16.17 -10.96 -10.02 +0.97



Atlantic Basin Crude Oil Market: After hitting a 12 month high premium of $2.15 to dated Brent on September 15th, the Forties differential to dated Brent fell as increased avails coupled with slack demand pushed premiums lower. For the week ending last Tuesday, November 1st, the differential had retreated to a 14 cpb discount to dated Brent. Today, it was reported that North Sea Forties differential fell today with a sale of a December 04-06 Forties parcel at dated Brent plus 30 cpb. With supplies of Forties expected to increase in December and recovery in Libyan production, Forties differentials will likely come under pressure. The graph below indicates a value for Forties at a 21 cpb discount to dated Brent, off 7 cpb for the day; down 16 cpb from last Tuesday;



and $1.94 below the September 15th twelve month high of $2.15.

The following graph is a plot of the absolute Forties price from November 01, 2010 through cob today, November 15, 2011.

Brent 1st month price closed yesterday at a premium to WTI of $14.60, down $4.21 from last Monday’s close and $15.34 off the September 21, 2011 twelve month high premium of $29.94.

The following graph is a plot of the Brent 1st month price from November 01, 2010 through cob today, November 15, 2011.

Nigerian crude oil differentials remained under pressure due primarily to additional supplies of Bonny Light and the gradual return of light Libyan crude into the market. It was reported that 10 cargoes of Nigerian crude remain unsold in December, with 3 additional cargoes of Bonny Light available. Benchmark Qua Iboe was assessed at a premium of $2.10-$2.30 to dated Brent. The graph below indicates a premium for Qua Iboe of $1.23 to 1st Month Brent, off 2 cpb for the day; down 18cpb from last Tuesday’s premium of $1.41; and $2.81 off the March 22, 2011 twelve month high of $4.04. Based on 1st month Brent, Qua Iboe is valued at a premium of 14 cpb over Bonny Lt. Please note that the



graph below is based on 1st Month Brent and not dated Brent.

At cob today, the Bonny Lt premium to 1st Month Brent was $1.09; off 7 cpb for the day; d down 22 cpb from last Tuesday’s close of a $1.68 premium; and $2.80 under the March 22nd twelve month high of $3.89. A yearly low of a $0.04 premium of Bonny Lt to 1st month Brent was recorded Thursday, September 22nd. The low premium of 36 cpb for Bonny Lt over 1st Month Brent was recorded on July 18, 2011.

The following graph is a plot of the absolute Bonny Lt price from November 01, 2010 through cob today, November 15, 2011.

Trade in Russian Urals crude was little changed today at a premium to dated Brent as traders reported that most of November cargoes have been sold. Once the December lifting programme is announced, market direction will be better defined.

The chart below indicates Med Urals, at a premium of 5 cpb to dated Brent; unchanged today; 2 cpb lower than last Tuesday’s close while NWE Urals is valued at a premium of 4 cpb to dated Brent; unchanged from yesterday; but up 24 cpb from last Tuesday’s close. The Med Urals differential is $1.84 above its twelve month mean discount of $1.79 and the NWE Urals differential is $1.92 above its twelve month mean discount of $1.88. The 12 month high premium of 40 cpb to dated Brent for Med Urals was recorded on Friday, September 9th and the 12 month high premium of 38 cpb to dated Brent for NWE Urals was recorded on Monday, September 12th.



Light Louisiana Sweet, <LLS>, and Heavy Louisiana Sweet Crudes, <HLS>: Since the value for West Texas Intermediate<WTI> continues to bear little current market relationship to other crudes, this weeks’ comparisons continues to use 1st Month Brent as the ‘marker crude.’ Hopefully this will create a more useful market comparison over time. Yesterday <LLS> closed at a premium of 30 cpb to 1st Month Brent and <HLS> closed at a premium of $1.80 to 1st Month Brent, with the <LLS> differential down 89 cpb and the <HLS> differential up 46 cpb for the period of November 7th through November 14th. The <LLS> differential to 1st Month Brent is $5.20 off the respective 12 month high premium of $5.50 for <LLS> recorded March 1st and the <HLS> differential to 1st Month Brent is $4.66

off the respective 12 month high premium of $6.46 for <HLS> recorded September 6th.

The absolute prices for <LLS> and <HLS> for the period of November 01, 2010 thru November 14, 2011 are reflected in the following graphs, with the HLS price maintaining a premium over LLS for the majority of the time since June 14th. However, from October 17th thru Thursday, November 3rd, LLS maintained a premium to HLS (the first time since July 29th when LLS hit a premium of 90 cpb to HLS). On Friday, November 4th, LLS and HLS were at parity and last Monday HLS had moved back to a premium to LLS, at 15 cpb. For the period of November 7th thru November 14th HLS maintained a premium to LLS, closing yesterday $1.50 higher.



Mars; Poseidon and West Texas Sour: Since the value for West Texas Intermediate<WTI> continues to bear little current market relationship to other crudes, this week, the relative comparisons continue to use 1st Month Brent as the ‘marker crude’ for comparisons to Mars Sour and Poseidon. Hopefully this will create a more useful market comparison over time.

Differentials through cob yesterday are reflected in the charts below. The Mars Sour 1st

month differential (intra-week) closed yesterday at a discount of $3.90 to 1st Month Brent, down $1.19 from last Monday’s November 7th close of a discount of $2.71 and $6.36 off the September 6th twelve month high of $2.46. From Monday’s November 7th close thru cob yesterday, the Poseidon differential to 1st Month Brent also slipped, falling $1.19 to a discount of $3.75 to 1st Month Brent and is $6.01 below the recent September 6th twelve month high premium of $2.26.

West Texas Sour, <WTS>, price is based on the price developed by subtracting the WTS differential to <WTI> from the <WTI> price. For the period of, November 7th through November 14th, the <WTS> price was up $2.43 to $98.80 and is up $22.63 since hitting the low of $76.24 on October 4th.



Crude Price Differentials to 1st Month Brent The <LLS> diff to 1st Month Brent closed yesterday at a premium of 30 cpb, down 89 cpb from last Monday’s close and $5.20 off the March 1st twelve month high of $5.50; the Bonny Lt premium to 1st Month Brent closed yesterday at $1.16, off 24 cpb from last Tuesday and $2.73 off the March 22nd twelve month high premium of $3.89; and the <WTI> premium to 1ST Month Brent closed yesterday at a discount of $14.60 up $4.21 from last Monday, and $10.19 off the 2011 January 4th high of a discount of $4.41 to 1st Month Brent. The <WTI> premium to 1ST Month Brent is up $12.96 over the last five weeks.

2010 LLS less Brent

(1st Month) Bonny Lt less Brent (1st Month)

WTI less Brent (1st Month)

Date of High Diff May 25 May 28 Jan 19 High Diff 6.01 2.33 3.51 Dec 31 4.37 1.20 -1.28 2011 Date of High Diff Mar 01 Mar 22 Jan 04 High Diff 5.50 3.89 -4.41 Date of Low Diff June 15 Sept 22 Sept 21 Low Diff -6.54 0.04 -29.94 Jan 14 -0.14 0.65 -7.49 Jan 31 3.45 1.87 -7.30 Feb 28 3.27 2.43 -15.53 Mar 28 1.57 3.66 -11.83 Apr 26 1.77 2.25 -12.28 May 27 1.96 2.16 -14.14 June 27 -1.15 1.56 -14.55 July 25 -0.38 0.46 -20.38 Aug 26 -1.42 2.66 -26.47 Sept 19 1.46 1.03 -26.69 Sept 26 -0.47 0.17 -26.72 Oct 03 0.20 2.50 -25.55 Oct 10 3.08 1.97 -23.82 Oct 17 0.06 1.68 -26.54 Oct 31 2.70 1.51 -15.90 Nov 07 1.19 1.40 -18.81 Nov 14 0.30 1.16 -14.60



FUTURES TRADE

NYMEX Crude Oil Price - 2010: After hitting $86.84 on April 06, front month NYMEX crude price moved to a yearly closing low of $68.01 on May 20 driven down by concerns over European financial stability. NYMEX front month crude price continued to move up in the last two months of 2010; exceeding the previous 25 month closing high of $87.81 recorded Nov 10 and Nov 11, closing Dec 12 at $89.38. On Tuesday, Dec 07 front month NYMEX crude price moved to a new high of $90.76 during the day before pulling back and closing at $88.69, down 69 cpb for that day. An intra-day high for 2010 of $92.06 was hit on Dec 31 and the closing high for the year of $91.49 was hit on Dec 28. Crude certainly finished 2010 in strong fashion.

NYMEX Crude Oil Price - 2011: The chart below includes the front month NYMEX crude price for 2011 through cob Monday, November 14th, the 51st week of 2011 pricing. The low closing of $75.67 was recorded Tuesday, October 04, 2011 and the high closing of $113.93 was recorded Friday, April 29, 2011 with an intra-day low of $74.95 recorded Tuesday, October 04, 2011, and an intra-day high of $114.83 recorded Monday, May 02, 2011.

The front month NYMEX crude price has trended downward since April 29th pushed lower by concerns about recovery of global economies. But since closing at $75.67 on October 4th, NYMEX crude price has tended higher. For the week ending November 7th the mean price added 7 cpb to $93.87 with the closing price on November 14th up $2.62 from last Monday’s closing price of $95.52 and up $22.47 from the October 4th close.

Since hitting a low of $84.15 on February 15th, crude price trended higher through April 29th due to the uncertainty and supply concerns associated with the continuing strife in Libya and other Middle East counties with the price peaking at $113.93 on Friday, April 29th. The impact of the natural disaster in Japan and resulting collateral damage, in particular the continuing problems encountered with the damaged nuclear plants in Japan, also added to uncertainty and anxiety and upward pressure on crude oil prices.



Since hitting the twelve month high of $113.93 on April 29th, crude price fell hard, closing down $16.75 at $97.18 on May 6th. And since then front month NYMEX crude price has trended lower, reaching a closing low of $75.67 on Tuesday, October 4th. But since October 4th front month NYMEX crude price has trended higher and closed at $98.14 yesterday, up $22.47 or 29.7% from the October 4th low.

Today front month NYMEX crude (December contract) traded from a low of $97.51 to a high of $99.62, closing up $1.23 at $99.37, up $2.57 for the week. Since October 4th, December NYMEX crude price is up $23.50 or 31.0%. Through cob today, the Jan/ Dec crude spread gained 16 cpb to a 6 cpb premium (returning to contango); possibly putting storage plays back in play. NYMEX 3-2-1 Crack: From cob Tuesday, November 08, 2011 thru cob today, the December 3-2-1 crack fell $5.17 to $17.43, with the gasoline crack down $7.64 to $9.23 while the heating oil crack slipped 26 cpb to $33.82. For the day the Dec 3-2-1 crack was up 27 cpb, with the gasoline crack up 83 cpb and the heating oil crack off 85 cpb. The WTI price continues to be depressed vs other crudes, resulting in ‘almost meaningless’ cracks, although we can glean trends from the weekly moves.

NYMEX 3-2-1 Crack: $/Bbl

2011 Oct 04 Oct 11 Oct 18 Oct 25 Nov 01 Nov 08 Nov 15 Nov 32.13 31.78 30.96 - - - - Dec 30.25 29.58 29.93 24.44 23.82 22.60 17.43 2012 Jan 29.11 28.33 29.19 24.08 23.34 22.51 17.58 Feb 28.34 27.47 28.58 23.86 23.07 22.44 17.84 Mar 27.80 26.99 28.10 23.75 22.98 22.51 18.16



Apr 29.99 29.32 30.60 26.99 26.24 26.06 22.09 May 29.18 28.70 29.78 26.51 25.81 25.63 21.87 June - - - 25.88 24.83 25.05 21.39

FINANCIAL COMMENTARY DJIA Recent History; Oct 12, 2007 – Dec 31, 2010: On October 12, 2007 the DJIA hit an all time closing high of 14,093. Following the near financial collapse in 2008 the DJIA continued in a downward trend hitting a low of 6,547 non March 09, 2009. From the Mar 2009 low through Apr 26, 2010 the DJIA moved up over 70%, to 11,205, with the move generally smooth and steady. But from April 26, 2010 the ‘placid’ markets were hit by several European crises, led by the near default by Greece of its debt obligations and by the lack of job growth in the U.S. On April 27, 2010 the DJIA lost 214 points and posted triple-digit moves on 13 of the next 17 trading days. Worst was the ‘Flash Crash’ on May 06, 2010 when the Dow lost 998 points in a matter of minutes, only to rally more than 600 points, before closing down more than 323 points at 10,520.32. But the Dow showed resiliency since that time and for 2010 closed at 11,577.51 up more than 11% from the closing 2009 DJIA of 10,428.05. 2011 U.S. Economy: The DJIA closed the first quarter this year with its best start in more than a decade, rising 6.4%, and closed March 31st at 12,320. The index of 30 large companies gained 742 points in the first quarter, the largest first quarter gain in ten years and the second best on record. Stocks rose in the first quarter despite uprisings in the

Arab world, a significant jump in oil prices and the earthquake, tsunami and nuclear crises in Japan. The U.S. financial market has certainly shown resilience in the face of uncertainty year-to-date. Stocks rose consistently from last Sept thru Feb 18th of this year when the Dow closed at 12,391, at that time its highest close since June 05, 2008. But then, political disruptions in Tunisia, Egypt, Libya, Syria and other Middle Eastern counties, coupled with the natural disasters in Japan and resulting collateral damage, in particular the problems encountered with nuclear reactors led to an uncertain market, with the DJIA falling under 12,000 immediately after the natural disasters in Japan. The Dow moved up through April, hitting the yearly closing high of 12,811 on April 29th. From this point on, the Dow has trended lower with volatility pretty much the name of the game after the July debacle in Washington, D.C. over increasing the debt limit, with daily triple digit swings becoming the norm,. The following table illustrates this volatility which has carried forward since August. Given the political climate in Washington D.C. and the fragile financial conditions in the Euro-zone countries there is little doubt that this volatility will continue.



Date

Dow Closing

Days of Triple Digit Moves

Date

Dow Closing

Days of Triple Digit Moves

2009 Close 10,428 June 30, 2011 12,414 5 Sept 30, 2010 10,788 July 29, 2011 12,143 Dec 31, 2010 11,578 15 Aug 31, 2011 11,614 Feb 18, 2011 12,391 16 Mar 31, 2011 12,320 Sept 30, 2011 10,913 4 15 Apr 29, 2011 12,811 Oct 31, 2011 11,955 5 4 May 31, 2011 12,570 Nov 08, 2011 12,170 9 3 June 30, 2011 12,414 Nov 15, 2011 12,096

From September 20th thru October 3rd the Dow plummeted 753 points as Euro-zone financial worries persisted, including the high probability of default by Greece. But over the period of October 4th thru October 11th, perceived optimism over plans by financial ministers in the Euro-zone countries helped the Dow reverse its ‘tortuous’ downtrend and the Dow was up 761 points, with the 330 point increase on October 10th leading the way. For the week ending October 18th, volatility continued with triple digit moves on four of the five trading days with the Dow able to squeeze out a gain of 161 points for the week and for the week ending October 25th, the Dow squeezed out a weekly gain of 130 points with triple digit moves on three of the five trading days. For the week ending November 1st, the Dow was off 49 points, closing at 11,658, dropping 276 points on October 31st and 297 points on November 1st, as the financial crisis in the Euro-zone escalated. Last week the Dow added 512 points, closing at 12,170, even with the escalation of financial problems in the Euro-zone. This week the DOW is down 74 points,

not too bad, given the current situation in several of the Euro-zone countries. The following U.S. economic reports are due this week: Today: the Producer Price Index for October and business inventories for September. Wednesday: Consumer Price Index for October and capacity utilization for October. Thursday: weekly jobless claims; housing starts for October; and the Philadelphia Fed manufacturing index for November. Friday: leading economic indicators or October. Corporate Earnings: Today: Home Depot; Dell; Beazer Homes; Saks; TJX; and Wal-Mart Stores. Wednesday: Limited Brands and Target. Thursday: Gap and Sears Holdings. In the United States: Today: A house Judiciary subcommittee was to conduct a hearing about computer security; and the Senate Banking committee was to conduct a hearing about oversight of the Federal Housing Finance Agency. Wednesday: the House



Oversight and Government Reform Committee will conduct a hearing about Fannie Mae and Freddie Mac bonuses. Thursday: Department of Energy Secretary Stephen Chu will testify before a House Energy and Commerce subcommittee about the Obama administration’s decision to award a $500 million loan guarantee to the solar panel maker Solyndra. Friday: a House Energy and Commerce subcommittee will conduct a hearing about the regulation of Internet gambling. . DJIA 2011: Today the Dow inched up 17 points, closing at 12,096 and is down 74 points

for the week, not too bad, given the current situation in several of the Euro-zone countries. U.S. Dollar: Today the U.S. dollar was up against the Euro and down against the Japanese yen and for the week was up 1.89% against the Euro and down 1.28 % against the Japanese yen. The U.S dollar index was up for the day and up 1.66% for the week, pushed higher by growing uncertainty over the financial condition of several Euro-zone countries. The table below includes spot over the last twelve months.

2010 2011

Oct 26 Nov 30 Dec 21 Jan 25 Feb 22 Mar 29 Crude Oil Price: $/bbl

82.55

84.11

89.82

86.19

93.57

104.79

DJIA 11,169 11,006 11,533 11,977 12, 213 12,279 NASDAQ 2,487 2,498 2,668 2,719 2,756 2,757 EURO/$ 0.7188 0.76935 0.76107 0.73297 0.73169 0.71093YEN/$ 81.3039 83.5891 83.6184 82.3248 83.142 82.184 U.S. $ Indx 77.662 81.195 80.718 78.002 77.789 76.249

2011

Apr 26 May 24 June 28 July 26 Aug 30 Sept 27 Crude Oil Price: $/bbl

112.21

99.59

92.89

99.59

88.90

84.45

DJIA 12,595 12,356 12,189 12,501 11,560 11,191 NASDAQ 2,848 2,746 2,729 2,840 2,576 2,547 EURO/$ 0.68414 0.70977 0.70121 0.69104 0.69435 0.73643YEN/$ 81.7062 81.9434 80.8569 78.1010 76.7602 76.4637U.S. $ Indx 73.837 75.882 75.054 73.474 73.931 77.506

2011

Oct 18 Oct 25 Nov 01 Nov 08 Nov 15 Nov 22 Crude Oil Price: $/bbl

88.34

93.17

92.19

96.80

99.59

DJIA 11,577 11,707 11,658 12,170 12,096 NASDAQ 2,657 2,638 2,607 2,728 2,.686 EURO/$ 0.73121 0.71849 0.73384 0.72527 0.73899 YEN/$ 76.7549 76.146 78.2124 77.9736 76.9731 U.S. $ Indx 77.138 76.41 77.49 76.586 77.859



Gold Price: Gold price treaded water this week, closing at $1,781.70 today, down $16.70 for the week. The uncertainty created by the

financial crisis in the Euro-zone countries, in particular, Greece, is reflected in the fluctuating gold price.

Some Closing Gold Prices - $ Per Ounce

2009 2010 2011 2011 2011 2011 2011 Dec 03 Dec 31 Jan 03 Feb 08 Mar 02 Apr 08 May 02 $1,226.50 $1,421.10 $1,422.60 $1,363.40 $1,437.20 $1,473.40 $1,556.70 2011 2011 2011 2011 2011 2011 2011 June 01 June 28 July 05 July 18 July 21 July 29 Aug 03 $1542.50 $1,499.70 $1,512.30 $1602.10 $1,586.80 $1,628.30 $1,663.40 2011 2011 2011 2011 2011 2011 2011 Aug 09 Aug 17 Aug 18 Aug 23 Aug 26 Aug 31 Sept 13 $1,740.00 $1,791.20 $1,818.90 $1,858.30 $1,794.10 $1,828.50 $1,826.80 2011 2011 2011 2011 2011 2011 2011 Sept 15 Sept 16 Sept 19 Sept 20 Sept 22 Sept 23 Sept 26 $1,778.50 $1,812.10 $1,776.40 $1,806.60 $1,739.20 $1,637.50 $1,592.50 2011 2011 2011 2011 2011 2011 2011 Oct 03 Oct 14 Oct 25 Oct 26 Oct 27 Oct 31 Nov 01 $1,656.00 $1,681.80 $1,699.60 $1,722.70 $1,746.70 $1,724.20 $1,711.0 2011 2011 2011 2011 2011 2011 2011 Nov 04 Nov 08 Nov 09 Nov 10 Nov 11 Nov 14 Nov 15 $1,755.30 $1,798.40 $1,790.90 $1,758.90 $1,787.50 $1,777.80 $1,781.70

U.S. INVENTORY REVIEW This Week’s Outlook: A Reuters poll of 8 analysts presented the following outlook for the week ending November 11th: crude stocks – down 1.2 million barrels due to lower imports and a projected 0.4% increase in refinery utilization to 83.0%; distillate stocks – down 2.1 million barrels; gasoline stocks – down 700,000 barrels. EIA Inventory Report for the Week Ending November 04, 2011: Total crude oil and petroleum products inventory, including the SPR, was down for the eleventh time in the past fourteen weeks, plummeting 15.343 million barrels to 1,745.352 million barrels and is now 124.77 million barrels under last year’s Sept 03 high of 1,870.122 million barrels. ‘Days of supply’ of distillate and crude oil lag last year by 7.0 and 2.7 days, respectively, while

gasoline exceeds last year by 0.6 day. For the week ending November 04, 2011, ‘Days of Supply’ of gasoline, distillate and crude oil compare to their respective 2006-2010 five year averages: of 22.2; 36.3 and 22.9 days as follows: gasoline – 1.6 days higher; distillate – 4.6 days lower; and crude oil – 0.4 day higher. Crude oil inventory, excluding the ‘SPR’ was 338.09 million barrels, down 1.37 million barrels from last week’s inventory of 339.46 million barrels, as imports slumped about 2.4 million barrels. Refinery utilization fell 2.6%, from 85.2% to 82.6% with no change in SPR inventory. Crude oil inventory is about 27.8 million barrels lower than last year’s level of 365.9 million barrels but is almost 5.7 million barrels higher than the 2006-2010 average level of 332.4 million barrels.



Crude oil inventory at Cushing fell 932,000 barrels to 31.139 million barrels from last week’s level of 32.071 million barrels, after hitting an all time high of 41.896 million barrels thirty weeks ago. Cushing inventory is 660,000 barrels under last year’s level of 31.799 million barrels and is 14.8 million under Cushing’s maximum working capacity of about 45.9 million barrels. PADD II inventory, also decreased, falling 1.032 million barrels from 93.218 million barrels to 92.186 million barrels, off the record high of 107.2 million barrels hit thirty-one weeks ago, and about 4.2 million barrels above last year’s level of 88.0 million barrels. U.S. distillate inventory fell 6.02 million barrels, from 141.89 million barrels to 135.87 million barrels with imports slipping 140,000 barrels.

The current U.S. distillate inventory level is more than 24.0 million barrels under the 2010 level of 159.9 million barrels and is 9.519 million barrels under the average inventory level of 145.388 million barrels for the 2006-2010 period. For the week ending November 4th gasoline inventory fell 2.107 million barrels to 204.167 million barrels, as imports slipped 217,000 barrels. Gasoline inventory is about 6.1 million barrels below last year’s level of 210.23 million barrels and is more than 1.5 million barrels higher than the average inventory level of 205.79 million barrels for the 2006-2010 period. Gasoline inventory is about 36.9 million barrels off the twenty-year high of 241.1 million barrels reached earlier this year on February 11th.

2009 2010 Week Days of Supply Week Days of Supply Ending Gasoline Distillate Crude Oil Ending Gasoline Distillate Crude Oil

Jan Avg 24.5 34.8 23.2 Jan Avg 25.5 42.8 23.8 Feb Avg 24.3 34.1 24.8 Feb Avg 26.6 41.2 24.5 Mar Avg 23.8 37.7 25.1 Mar Avg 25.3 39.4 24.9 Apr Avg 23.9 37.5 25.9 Apr Avg 24.4 41.0 24.5 May Avg 22.7 41.8 25.5 May Avg 24.1 39.4 24.1 June Avg 22.4 43.6 24.2 June Avg 23.7 40.3 24.0 July Avg 23.3 48.6 23.2 July Avg 23.6 45.5 23.3 Aug Avg 22.8 48.3 23.8 Aug Avg 23.9 49.3 23.5 Sept Avg 22.9 49.3 22.6 Sept Avg 24.4 45.6 24.0 Oct Avg 23.1 48.6 23.5 Oct Avg 24.0 44.2 25.5 Nov Avg 23.6 46.6 24.3 Nov Avg 23.3 39.4 25.6 Dec Avg 24.0 45.1 23.8 Dec Avg 23.6 42.4 23.3

2010 2011 Week Days of Supply Week Days of Supply Ending Gasoline Distillate Crude Oil Ending Gasoline Distillate Crude Oil

Jan Avg 25.5 42.8 23.8 Jan Avg 25.9 44.3 23.1 Feb Avg 26.6 41.2 24.5 Feb Avg 27.4 42.7 24.6 Mar Avg 25.3 39.4 24.9 Mar 04 24.6 39.6 25.2 Apr Avg 24.4 41.0 24.5 Apr Avg 23.2 39.2 25.2 May Avg 24.1 39.4 24.1 May Avg 23.2 37.3 25.6 June Avg 23.7 40.3 24.0 June Avg 23.3 38.1 24.4



July Avg 23.6 45.5 23.3 July Avg 23.2 42.0 23.2 Aug Avg 23.9 49.3 23.5 Aug Avg 23.1 40.8 22.8 Sept Avg 24.3 45.5 24.1 Sept Avg 23.7 40.9 22.4 Oct Avg 24.0 44.2 25.5 Oct Avg 23.6 36.8 22.7 Nov 05 23.2 38.7 26.0 Nov 04 23.8 31.7 23.3 Nov 12 22.8 38.9 25.4 Nov 11 Nov 19 23.4 39.4 25.4 Nov 18 Nov 26 23.5 40.4 25.4 Nov 25



Asia Desk

Asia Desk

15 Nov 2011 CRUDE SPREADS US$/BBL Dated Brent / Dubai Cabinda / Brent Tapis / Brent Tapis / Dubai Today 0.60 0.04 7.62 8.35 Yesterday 0.61 0.03 8.01 8.58 Last Week 3.94 0.03 6.97 10.59 90 Day Avg 5.74 -0.99 6.12 11.63 SOUR CRACKS Naphtha / Dubai Jet / Dubai Gas Oil / Dubai HSFO 380/ Dubai US$/MT

Today -16.44 19.60 21.18 -94.77 Yesterday -15.97 19.28 19.97 -94.12 Last Week -14.18 20.10 20.16 -93.78 90 Day Avg -5.23 19.03 17.79 -106.44 SWEET CRACKS Naphtha / Tapis Jet / Tapis Gas Oil / Tapis LSWR / Minas Today -24.79 11.25 12.83 -4.51 Yesterday -24.55 10.70 11.39 -4.28 Last Week -24.77 9.51 9.57 -3.21 90 Day Avg -16.86 7.40 6.16 -4.45 GRADE SPREADS 95RON / 92RON 95RON / Naphtha Jet / Gas Oil FO 180 / FO 380 US$/MT

Today 1.65 16.21 -1.58 14.50 Yesterday 1.70 17.32 -0.69 13.41 Last Week 1.69 22.40 -0.06 9.54 90 Day Avg 2.34 21.34 1.24 7.30 LOCATION SPREADS Naphtha Jet Gasoil HSFO 380 C&F Japan / AG US$/MT Singapore / AG Singapore / AG Singapore / NWE US$/MT

Today 30.48 2.21 2.34 64.24 Yesterday 30.49 2.21 2.34 71.88 Last Week 29.43 2.14 2.27 62.49 90 Day Avg 33.61 2.40 2.55 42.04

Documents

The ATS Reportatsenergy.com/sample_ats_report/arTuesday.pdf · resurgence of NYMEX crude price is somewhat baffling. The NYMEX front month crude closed up $1.23 at $99.37 and is up