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Special Focus on Independent Oil & Gas


distillates2. Crude prices can move markedly on account of certain products (clean middle distillates in particular), as witnessed during ‘07 and early ‘08 when crude prices surged due to a tightness in clean diesel supplies.


With an estimated 50%+ of future demand growth expected to come from middle distillates, refinery outputs of these products may prove to be as important as OPEC quotas and/or upstream investment in determining market dynamics.


Absolute Performance: 01/01/11-current Brent Tullow Borders (A)


FTSE All Share (ex. IT) Afren


Salamander Premier Soco


Nautical (A) Valiant (A) Enquest Cairn


Melrose (B) JKX (B) Heritage


Bowleven (A) -100% -80% -60% -40% Source: Thomson Reuters Finding different levels: Brent vs FTSE All Share


100 150 200 250 300 350 400


50 0 Dec-08


Dec-09 Brent


Dec-10 FTSE All Share (ex. IT) Source: Thomson Reuters


The IEA estimates an underlying ‘call on OPEC crude and stock change’ averaging 30.4 million b/d throughout 2012, keeping levels broadly in line with recent highs. This should help fill inventories depleted by the supply disruptions in Libya, particularly in Europe.


2 Petroleum products are usually grouped into three categories: light distillates (LPG, gasoline, naphtha), middle distillates (kerosene, diesel), heavy distillates/residuum (heavy fuel oil, lubricating oils, wax, asphalt).


Dec-11 -20% 0% 20% 40%


Drillers and Dealers :::


::: February 2012 Edition


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