Pitchbook US template

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D O L L A R S   A N D   D I S T I L L A T E S 
 D R I V E   C R U D E

October 2010
S T R I C T L Y   P R I V A T E   A N D 
 C O N F I D E N T I A L
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QE and high liquidity risk inflation short term,
but will add supply when rates rise
After the Liquidity Cycle
Gold /troz

• Gold prices are a good barometer of interest
  rates, liquidity and inflation risk
• QE risks weakening the US dollar, adding a
  further stimulus to North American and Emerging
  Market growth
• Linking of Fed policy to price levels, rather
  than growth a key change in policy could spark
  inflationary expectations and cause money to flow
  into commodities
• Low interest rates enable the oil market to hold
  high levels of inventory currently a
  stabilizing feature, but could become a driver of
  rising prices

Source JP Morgan Energy Strategy, Bloomberg
US Dollar and Crude Oil Correlation to Resume
Oil Price is Cheap When Measured in Gold
L A T E S T   M A R K E T   O U T L O O K
Source JP Morgan Energy Strategy, Bloomberg
Source JP Morgan Energy Strategy, Bloomberg
2
3
Base case price forecast Potential for major
disruptions from all directions
Old World Forward price solidly anchored

• Prior to the 2004-2008 price run-up and
  subsequent collapse, the forward curve was
  anchored around 20/bbl
• 20/bbl was thought to be the marginal cost of
  supply
• Short-term disruptions had minimal impact on
  long-term price views
• OPEC sought to manage market through inventories

• Over 2004-2008 worries about long-term supply
  escalated
• In 2008-2009 there was concern about the duration
  of the recession
• In both cases, long-term concerns directly
  impacted short-term prices
• The past year has seen a period of relative
  stability with the market poised at 70-80/bbl
• Is this the calm realistic?
• Will prices ratchet up again as we saw over
  2004-2008?

New World Disruptions will transmit across the
forward price curve
L A T E S T   M A R K E T   O U T L O O K
Source JPMorgan Energy Strategy
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4
Flexible LNG seeks to push into high value market
for oil substitutes

• Asian LNG imports grew by close to 30 percent in
  August versus the same period last year
• Korea was up over 80 yoy
• Demand was weak in 2009 due to the crisis, but
  new LNG supply is pushing into the Asian market
• Spot LNG is certainly competitive with
  oil...sellers seek to place flexible LNG in high
  value niche markets in place of oil (e.g., India,
  Kuwait)

Oil-linked Asia provides the highest value for LNG
Global Gas Prices What will Qatar do with its
flexible volumes?
Push into Asia
Source JPMorgan Energy Strategy, Bloomberg

• A huge question is what Qatar will do with over
  30 MTPA of flexible LNG initially targeted at
  the US and UK which is now ramping up
• This has important implications for the oil
  market as it is 740 kbd of oil equivalent
• Will it push into low value markets to compete
  with coal, or will it get pulled into Asia as a
  substitute for oil?
• The Middle East is the latest region to emerge as
  a surprise LNG importer...replacing oil

L A T E S T   M A R K E T   O U T L O O K
3-8/MMBtu
9-13/MMBtu
3-5/MMBtu
How will Qatar adjust to new market realities?
Source JP Morgan
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5
Oil demand is robust, poised to move into supply
deficit
Global Demand Growth Profile and Forecasts by
Region, 2009-2011

• World oil demand growth to moderate to 1.6 mbd in
  2011
• Still seen above trend, driven by Emerging Market
  demand
• China imports easing
• But signs it is drawing on stocks
• Structural risks
• Natural gas substitution
• Efficiency

World Oil Balance
L A T E S T   M A R K E T   O U T L O O K
Source JPMorgan Energy Strategy

• OPEC output has stabilised at 29.1 mbd, even
  assuming rising OPEC supplies, a market deficit
  is seen
• Still see trend GDP growth
• Receding risks of double-dip recession
• But Eurozone problems show they have not gone away

Source JPMorgan Energy Strategy
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Rising oil demand reflects infrastructure
strains, comfort with high prices
US Port Traffic
Vehicle Fuel Consumption and Oil Prices
Source JP Morgan Energy Strategy, Port Authority
Long Beach and LA
Source JP Morgan Energy Strategy, US Bureau of
Transport, EIA
Global Air Traffic Indicators

• World oil demand is coming in stronger than
  economic growth indicators suggest
• Robust demand from Emerging Market economies due
  to growth straining infrastructure - much in the
  same way as 2004 and 2008
• Signs that initial conservation response to high
  prices is waning not surprising considering oil
  prices have averaged 75 bbl for five years now
• Subsidies being removed in emerging markets, but
  likely to be re-imposed if prices rise

L A T E S T   M A R K E T   O U T L O O K
Source JP Morgan Energy Strategy, IATA
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Distillate will provide the marginal demand
barrel in 2010
Global Product Demand Year-on-Year Change
Non-OECD Product Demand Year-on-Year Change

• Dramatic divergence in product demand growth
  trends between Emerging Markets and OECD post
  recession
• Light ends have driven the market higher, led by
  the petrochemical sector
• Decline in light ends reflects weaker gasoline
  demand and end of petchem restocking
• Maybe too bearish
• Middle distillate demand (gasoil, diesel, jet and
  kerosene) has shown signs of improvements in the
  past few months
• Strong gasoil/diesel cracks and is good news for
  complex refiners

OECD Product Demand Year-on-Year Change
L A T E S T   M A R K E T   O U T L O O K
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In an industry running at 93 capacity there is
little margin for error
International Energy Agency Concern
Peak Oil Projection
L A T E S T   M A R K E T   O U T L O O K

• There is a need to find 3-4 mbd of new oil every
  year just to stand still
• But we have been doing that for the past decade
• When we are less successful or demand surges,
  prices spike
• When we are marginally better, there is a
  downward bias to prices
• Future project analysis only provides clarity for
  the next 3-4 years
• Reality is there are plenty of hydrocarbons
  around
• The real questions are the price to produce them
  and the price to curtail demand
• A major concern is that even with the highest
  level of spare capacity for a decade, the
  industry is running at 96 of capacity
• There is little margin for error

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Meeting emerging market growth will be a challenge
Growth in Emerging Markets
Indexed Global Oil Demand Growth

• EM economies pull more oil for every extra
  dollar earned than mature economies.
• EMs have been the driver of oil demand for much
  of the last decade, but now that they make up
  nearly half the world oil economy
• Forecast of Chinese demand for 2010 is up 10.4,
  plus another 5.3 in 2011. It will surpass the
  US as the worlds largest consumer by 2020
• Demand growth for 2011 from India and Brazil
  with yoy increases of 4.4 and 4.8,
  respectively.

Percent Share of Global Oil Demand
Chinese Oil Demand Growth
L A T E S T   M A R K E T   O U T L O O K
Source JP Morgan Energy Strategy, JODI, IEA
Source JP Morgan Energy Strategy, JODI, IEA
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10
High price and better equipment availability
allows production to grow
Per country Revisions ( and Vol) to 2010
Supply-ex FSU

• Over the past year, 2010 non-OPEC supply
  projections by the International Energy Agency
  have been revised up by 770 kbd
• Russia and Azerbaijan were two major FSU
  forecasting issues, which cancelled each other
  out
• Russia higher to new projects
• Azerbaijan to ongoing project delay
• Supply revised higher in 41 countries, lower in
  23
• Decline (and forecasting error) has not gone away

Number of countries with revisions

• Russia and USA alone present upside risk to 2011
  forecast non-OPEC supply growth of 0.5 mbd
• Corporate guidance suggests Russian output growth
  of 350 kbd, JPM forecast 80 kbd
• US growth could be revised up on
• lower drilling impact to Gulf of Mexico
• Rapid shale oil development
• Strong pace of development in West Africa
• Iraq, Brazil provide two-way risks

L A T E S T   M A R K E T   O U T L O O K
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OPEC will let oil prices swing between 55 and
100 per barrel

• OPEC uncomfortable with prices below 70 bbl, but
  would only act if prices dipped below 65 bbl
• The time taken to gather a response could see
  prices dip to 55
• Saudi budget needs 70 to balance with social
  spending growing rapidly, Saudi will be
  comfortable if prices rise gradually
• Outside of a significant downward price shift,
  OPEC is not likely to change current quotas.
  Additional output from Iraq/Nigeria. Still
  concerned about high prices

Prompt WTI Price

Geopolitical flashpoints
Source JP Morgan Energy Strategy, JODI, IEA
L A T E S T   M A R K E T   O U T L O O K

• High geopolitical risks over next six months
• Attacks on Iraqi northern pipeline have been
  stepped up during political impasse
• Nigerian elections risk positioning by Niger
  Delta rebels
• Iranian sanctions seem to be having economic
  effect, but international patience wearing thin
• Venezuelan elections already causing surge in
  diesel demand as president seeks to avert rolling
  blackouts.

Source JP Morgan Energy Strategy, JODI, IEA
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Refinery Crude Runs
Post-Summer Runs and Margins
NYMEX product cracks
Instructions If a series is labeled other, plot
it as the last entry in the data sheet. Recolor
the other data point gray by selecting the gray
color in the palette.

• Refining runs are being supported by the bottom
  half of the barrel
• US refining runs have remained high despite
  impending maintenance
• Diesel and fuel oil demand for power generation
  has been higher than years prior
• Diesel demand forecast has been adjusted up by
  150 kbd globally. Fuel oil adjusted up by a
  similar amount more significant effect due to
  smaller pool
• Surge in demand is reflected in prompt cracks
  rising to above 15/bbl for ULSD in Europe, its
  highest level since late June
• Northern hemisphere winter heating demand could
  keep inventories tight in coming months
• Market will be reluctant to draw inventory prior
  to 1Q11

US Refinery crude runs
L A T E S T   M A R K E T   O U T L O O K
Source JP Morgan Energy Strategy, EIA
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Global crude demand peaked in the summer winter
rebound seen in 4Q10
Crude Market Balance
L A T E S T   M A R K E T   O U T L O O K

• Material upward revisions to supply estimates
  suggest market less tight than previously thought
• Crude market tightness still seen peaking in
  July/August
• Thereafter seasonal maintenance points to renewed
  build., before year-end ramp-up in runs start the
  next draw

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World product supply potential points to
distillate-led tightness
Tighter Fuel Oil to Pressure Upgrading Margins

• Contents
• Grouped country pieces
• Ungroup to separate into individual shapes
• Regroup to restore groupings

L A T E S T   M A R K E T   O U T L O O K
Source JP Morgan Energy Strategy

• Robust economic growth in Emerging Market
  economies, Asia in particular, underpins
  distillate-led demand growth
• By contrast rising supplies of ethanol and NGL
  volumes will pressure gasoline cracks
• Continued robust naphtha demand growth provides
  some support to light distillate markets
• A similar picture of rising supplies (OPEC NGL
  volumes) is evident in LPG markets
• By contrast diesel/gasoil markets look set to
  tighten despite distillate-focused upgrading
  investment

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Reported Crude Stocks have fallen by 10 from
early 2009 peak
OECD Commercial Crude Inventories and Floating
Storage
L A T E S T   M A R K E T   O U T L O O K
OECD land-based crude stocks and global floating
crude storage has fallen by over 100 mb since
the peak in April 2009
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Medium-term risks to near-term pricesSpare
capacity starts to fall sharply from 2011

• Pace of economic growth and Iraqi oil field
  development are the real uncertainties as we move
  forward
• Financial stresses and unemployment could drive
  efficiencies, but policy and high prices will be
  more effective and permanent
• Electric vehicles are unlikely to have a
  significant impact on demand until post 2015 at
  best

L A T E S T   M A R K E T   O U T L O O K
JPMorgan Medium Term Crude Oil Price Forecast

• Price forecast assumes OPEC will try to moderate
  increases
• but will the market rise much faster, to prevent
  a supply crunch happening?

All Forecasts are period averages. Actual to date
prices for 1Q10 and 2Q10 are as of July 30, 2010
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J.P. Morgan Global Refinery Analysis Model

• J.P. Morgans Global Refinery Analysis Model
  (GRAM) is a bottom-up analysis of existing
  refinery capacity and confirmed investment
  projects
• The analysis covers more than one thousand
  individual new units adding to the existing 750
  detailed refineries in the model
• Regional crude slates and volumes are forecast
  based on typical regional consumption patterns
  and forecast changes to crude quality
• NGL supply volumes are assumed to be a substitute
  for crude in the global crude market
• Implications for the residue balance in
  particular
• Supply analysis assumes OPEC will maximize
  production of non-quotas barrels ahead of crude
• The GRAM uses 50 crude assays to analyze output
  from the initial distillation of the crude. The
  model then runs these outputs through secondary
  processing units and aggregates the output into
  seven finished product categories
• Model assumes that most capital intensive units
  are filled first
• i.e. cokers are filled before visbreakers
• The impact of the new capacity additions are
  shown through a comparison of total product
  supply of these seven product categories against
  JP Morgans detailed product demand model
• Regional and global product market balances are
  then calculated including other sources of supply
  including NGLs and biofuels

M E T H O D O L O G Y      R E F I N E R Y 
 O U T L O O K
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Regional refining capacity growth the Americas
EMEA Asia-Pacific

• Global refining industry set for substantial
  growth in 2010-2014 period
• Growth is led by regional champions
• China in Asia
• Saudi Arabia in the Middle East
• The US and Brazil in the Americas
• Ongoing investment in upgrading capacity will
• Further boost the supply of light clean products
• Continue to tighten fuel oil markets
• Puts upgrading margins under pressure

Global Refining Capacity Growth 2010-2014 (mbd)

• Regional variations will become critical to
  refinery profitability
• European and Japanese refineries faces the
  greatest pressure to close capacity
• Falling regional demand keeps profit generation
  under intense pressure
• Rising biofuels supplies globally will further
  undermine potential returns

Source JP Morgan Energy Strategy, Wood Mackenzie
M E T H O D O L O G Y      R E F I N E R Y 
 O U T L O O K
18
19
Regional upgrading capacity growth the Americas
EMEA Asia-Pacific
Global Upgrading Capacity Growth Profile 2010-2014
Global Crude Distillation Capacity Growth
2010-2014
Source JP Morgan Energy Strategy, Wood Mackenzie
Source JP Morgan Energy Strategy, Wood Mackenzie
M E T H O D O L O G Y      R E F I N E R Y 
 O U T L O O K

• Asia Pacific and Middle East lead CDU capacity
  increase
• Driven by supply security concerns in China,
  India
• OPEC expansions driven by
• Energy security
• Desire to maximize revenue from the barrel
• Market control
• Brazil, Mexico and the US bolster the Americas
• Upgrading capacity additions concentrated in next
  three years

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20
Oil market outlook Conclusions

• Linking of Fed policy to price levels, rather
  than growth a key change in policy could spark
  inflationary expectations and cause money to flow
  into commodities
• Low interest rates enable the oil market to hold
  high levels of inventory currently a
  stabilizing feature, but could become a driver of
  rising prices
• The recent decision to allow output to drift
  higher and lower stock levels adds weight to
  extreme views on higher underlying decline rates
  and lower spare capacity
• World oil demand growth of 2.2mbd will moderate
  to 1.6 mbd in 2011
• Still seen above trend, driven by Emerging Market
  demand and healthy EM GDP growth.
• Light ends have driven the market higher, led by
  the petrochemical sector
• Middle distillate demand (gasoil, diesel, jet and
  kerosene) has overtaken gasoline/naphtha as
  transportation gain become the dominant feature
  of world oil demand growth.
• A major concern for the industry and OPEC is that
  even with 6mbd of spare, the industry is running
  at 93 of capacity suggesting there is little
  margin for error
• OPEC output has stabilised at 29.1 mbd, and
  upcoming OPEC meeting is unlikely to see any
  departure from current script.
• The market seems happy to anchor prices in the
  80-100/bbl long-term, but is this rational?
  Supply and demand shocks could quickly force a
  re-appraisal of long-term equilibrium prices if
  circumstance change.

L A T E S T   M A R K E T   O U T L O O K
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North American capacity expansion driven by the US

• US refiners continue to adapt to rising supplies
  of heavy sour crude/bitumen from Canada, rising
  Shale Oil production and the Middle Easts
  increasingly sour crude slate
• Nearly 75 of US capacity additions relate to
  projects to increase the ability to process heavy
  sour crude

• Key projects include
• Motiva Port Arthur325 kbd new crude capacity in
  2012
• Marathon Garyville180 kbd new crude capacity on
  stream in 2010
• Projects involve substantial expansion of
  upgrading units
• However, these investment decisions, while still
  robust in term of potential economics ignore the
  changing landscape of the US crude marketnotably
  the rise of better quality oil from the emerging
  shale oil plays

US Coking Capacity Growth Projects
M E T H O D O L O G Y      R E F I N E R Y 
 O U T L O O K
Source JP Morgan Energy Strategy, Wood Mackenzie
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World product supply potential points to
distillate-led tightness
Tighter Fuel Oil to Pressure Upgrading Margins

• Contents
• Grouped country pieces
• Ungroup to separate into individual shapes
• Regroup to restore groupings

P R O D U C T   B A L A N C E S
Source JP Morgan Energy Strategy

• Robust economic growth in Emerging Market
  economies, Asia in particular, underpins
  distillate-led demand growth
• By contrast rising supplies of ethanol and NGL
  volumes will pressure gasoline cracks
• Continued robust naphtha demand growth provides
  some support to light distillate markets
• A similar picture of rising supplies (OPEC NGL
  volumes) is evident in LPG markets
• By contrast diesel/gasoil markets look set to
  tighten despite distillate-focused upgrading
  investment

22
23
North American supply potential gasoline
imports to diminish
North American Gasoline Market to Become More
Balanced

• Contents
• Grouped country pieces
• Ungroup to separate into individual shapes
• Regroup to restore groupings

P R O D U C T   B A L A N C E S
Source JP Morgan Energy Strategy

• Regional gasoline import requirement diminishes
  due to falling demand (despite Mexico)
• Rising ethanol supplies help rebalance market
• Current diesel exports are eroded by strong
  economic growth supporting diesel demand
• However we have assumed US refiners do not
  radically alter their operating mode i.e. they
  remain focused on max gasoline

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Upgrading capacity to tighten the fuel oil
balance in the coming years
Global Fuel Oil Supply and Demand Balance
Source J.P. Morgan Energy Strategy

• With the move towards cleaner/lower sulfur fuels,
  demand for the bottom cut of the barrel has
  continued to trend lower over the years despite
  strength in other product groups
• However, we expect the fuel oil balance to
  tighten considerably over the next several years
  as the current refinery buildout cycle is
  expected to add a considerable amount of
  upgrading capacity
• Much of the new refining capacity (the bulk in
  non-OECD Asia) is expected to be rather
  sophisticated, with the ability to reprocess much
  of the fuel oil produced into more desirable (and
  higher priced) middle and light end products
• In Europe and North America, the inability to
  build new greenfield refineries has led to
  additions of secondary units to existing
  infrastructure to produce a lighter product
  slate, reducing fuel oil yields

25
European supply potential gasoline exports
remain a threat to region
Diesel-Biased Demand Leaves Region Vulnerable to
Rationalization

• Contents
• Grouped country pieces
• Ungroup to separate into individual shapes
• Regroup to restore groupings

P R O D U C T   B A L A N C E S
Source JP Morgan Energy Strategy

• Despite lower crude run assumptions, declining
  regional demand leaves European refineries
  exposed to competition from rising Asian export
  volumes (particularly from India)
• In contrast to North America, Europes product
  balance moves more out of line with demand
• Capacity rationalization remains a real risk
  given low complexity many regional refineries

24
26
Conclusions global refining and product supply

• Refiners globally are over-investing in new
  capacity, and particularly upgrading capacity
• This is the area that has provided strong returns
  over the past 20 years, but by virtue of
  overinvestment will provide less of a competitive
  advantage in the future
• World refinery capacity and upgrading expansions
  to constrain refining margins for the next five
  years
• Upgrading capacity to keep fuel oil margins tight
  and narrow differentials between light/sweet, and
  heavy/sour crude oil prices
• Bulk of new capacity taking place in Asia and
  Middle Eastthe area of greatest demand growth
• Low clean freight rates to open up wider scope
  for product trade when Asia becomes over-supplied
• Refining profitability is therefore likely to be
  strongly influenced by location
  factorsparticularly access to low cost crudes
• Atlantic Basin crude supplies to be tightened by
  ongoing draw from Asia, Russian preference for
  supplies via ESPO pipeline, ongoing decline in
  North Sea
• US refiners continue to adapt to rising supplies
  of heavy sour crude/bitumen from Canada, rising
  shale oil production and the Middle Easts
  increasingly sour crude slate
• Significant investment in additional coking
  capacity will allow refiners to run heavier crude
  slatespositioning themselves to capture lower
  cost feedstocks on the Gulf Coast and
  potentially the US Midwest
• But many of these investment plans were signed
  off before the recent surge in shale oil
  production

P R O D U C T   B A L A N C E S
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J . P .   M O R G A N   G L O B A L 
 C O M M O D I T I E S   G R O U P

October 2010
S T R I C T L Y   P R I V A T E   A N D 
 C O N F I D E N T I A L
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J.P. Morgan Global Commodities Growth Story
Investing in our platform

• J.P. Morgan has made significant investments in
  building out and diversifying our Global
  Commodities platform and capabilities -
  organically and through strategic acquisitions,
  such as RBS Sempra
• J.P. Morgan's Global Commodities Group offers
  clients a comprehensive set of market making,
  structuring, risk management, financing and
  warehousing capabilities across the full spectrum
  of commodity asset classes

Key transactions accelerate J.P. Morgans growth

• Completed acquisition of RBS Sempras metals,
  oil, coal, plastics, agricultural, and
  concentrates non-U.S. emissions, European power
  and gas and investor products assets from the
  Royal Bank of Scotland and Sempra Energy in July
• Completed acquisition of RBS Sempras North
  America natural gas and power trading portfolios
  in October

• Acquired UBS Commodities Canada Ltd and UBS AGs
  global agricultural business
• Acquired EcoSecurities Group plc, a global leader
  in the carbon credit market

• Acquired Bear Energy as part of J.P. Morgans
  acquisition of Bear Stearns
• Acquired ClimateCare, a leading originator of
  carbon offsets

G L O B A L   C O M M O D I T I E S 
 O V E R V I E W

• J.P. Morgan expands energy trading platform
  organically
• Co-founded the New York Mercantile Exchanges
  Green Exchange

• J.P. Morgan corporate focus on developing market
  leading energy trading platform

2005-2006
2006
2008
2009
2010
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J.P. Morgan Global Commodities Group
Commodity risk expertise is interlinked with firm
wide capabilities

• Corporate Risk Management J.P. Morgan provides
  risk management solutions for clients hedging
  commodities exposure - clients covered include
  consumers, producers, refiners and traders of
  metals, energy and agriculture/softs
• Market Intelligence J.P. Morgan affords clients
  a wide view of the commodity markets given J.P.
  Morgans diverse client base and distributes
  industry leading research in all commodities
• Commodity Related Financing J.P. Morgan provides
  corporate finance solutions for clients seeking
  to buy or sell commodity assets or to leverage
  assets as collateral for financing transactions
• Leverage of J.P. Morgans internal resources
  (Research, Lending, Equity and Debt
  Underwriting)
• J.P. Morgans clients have access to J.P.
  Morgans complete platform
• Up to date on latest industry and product trends
• Strong customer relationships J.P. Morgan works
  closely with customers to design the most
  appropriate solution in the futures, cash, and
  over-the-counter commodities markets

J.P. Morgan stands out
G L O B A L   C O M M O D I T I E S 
 O V E R V I E W

• Commodity leader J.P. Morgan is at the leading
  edge of product development and risk management
  in the Commodity and Currency product space
• Risk transfer J.P. Morgan takes significant
  principal risk, publishes leading research, and
  works on a global structure to ensure that our
  customers get the best service available
• J.P. Morgans vast ability to take risk
• Long-dated risk J.P. Morgan can take on
  commodity risk beyond normal market tenors
• Outsized Risk J.P. Morgan has strong market
  risk lines so can warehouse sizable positions
• Exotic risk J.P. Morgan has the ability to trade
  products that many other banks do not
• Correlation risk J.P. Morgan has a large
  correlation book and has the ability to trade
  exotic correlation

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J.P. Morgan Covers Commodities Across the Supply
Chain
Futures Options
Global Commodities
Research

• OTC Metals, Energy and Ags
• Warehousing Risk
• Structured Products
• Long Dated Contracts

• Listed Futures and Options
• Specialist Trading Desks
• Global Clearing Solutions
• Electronic Trading

• Metals, Bulk Commodities
• Energy and Power
• Grains and Agricultural
• Technical Analysis

• Environmental Markets
• Carbon allowances and offsets (e.g., RGGI EUAs
  CERs VERs)
• Sulphur Dioxide
• Nitrogen Oxides
• Renewable Energy Credits

• Plastics
• Ethylene
• Polyethylene
• Polypropylene

• Weather
• Temperature
• Precipitation
• Wind
• Hurricanes
• Sunshine
• Crop Yields

• Energy and Power
• Coal
• Electricity
• Natural Gas
• Gasoline
• Crude Oil
• NGLs
• Transportation
• Freight

• Base Metals
• Steel
• Nickel
• Zinc
• Tin
• Copper
• Aluminium
• Lead
• Aluminium Alloy
• NASAAC

• Precious Metals
• Gold
• Silver
• Platinum
• Palladium

• Agricultural
• Cattle
• Dairy
• Grains
• Soybeans
• Wheat
• Corn
• Softs
• Coffee
• Sugar
• Cotton

G L O B A L   C O M M O D I T I E S 
 O V E R V I E W
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J.P. Morgan Oil Trading
Global Oil Trading Headcount by Location 24
hour coverage
London 18
Stamford 12
Calgary 6
New York 13
Geneva/ Zug 5
Houston 4
P H Y S I C A L   A N D   F I N A N C I A L 
 O I L   C A P A B I L I T I E S
Singapore 16

• In addition, there are over 20 waterborne and
  pipeline logistics experts spread across these
  locations

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Global Footprint
Worldwide Locations

• From metals and energy to environmental and
  agricultural commodities, our nearly 2,000
  professionals in more than 10 countries operate
  at the center of the commodity markets. In
  addition to our office locations, our Henry Bath
  warehousing franchise operates more than 100
  individual warehouses locations in 11 countries

Liverpool
Oxford
Oslo
London
Stamford
Stockholm
Calgary
Holland
New York
Beijing
Germany
Shanghai
Washington DC
Seoul
Chicago
Maryland
Hong Kong
G L O B A L   C O M M O D I T I E S 
 O V E R V I E W
Tokyo
Madrid
Houston
Istanbul
Singapore
Geneva
Dubai
Sao Paulo
Zug
Mumbai
Italy
Combined Location
JPM GCG Only Center
Johannesburg
Sydney
RBS-S Only Center
Major hub Expected in 2nd half of 2010
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J.P. Morgans Global Oil Physical Asset Overview
London
New York
Calgary
Geneva/ Zug
Houston
P H Y S I C A L   A N D   F I N A N C I A L 
 O I L   C A P A B I L I T I E S
Singapore

• J.P. Morgan can provide physical off take,
  delivery, storage, shipping and blending
  solutions across most petroleum products, enabled
  by strong trading, operational, and functional
  support expertise
• Unique market position because much of the
  physical activity cannot be achieved in the
  financial market (e.g., float a ship without a
  sale, unmatched physical longs and shorts in
  different market areas, trade non-hub locations)
• Participate in both wet and dry freight

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Select Oil Team Members
P H Y S I C A L   A N D   F I N A N C I A L 
 O I L   C A P A B I L I T I E S
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J.P. Morgan named Derivatives House of the Year
by EnergyRisk
Energy Risks Derivatives House of the Year
Recognized Products

• J.P. Morgan won EnergyRisks Derivatives House of
  the Year in June, 2010
• The magazine highlighted a year of innovation in
  which it executed a number of ground-breaking
  deals as key components of J.P. Morgans
  industry dominance
• Organic growth and a raft of acquisitions have
  led to a growing foothold in the commodities
  industry
• Bear Energy
• ClimateCare
• UBS Canadian energy and global agriculture
  businesses
• EcoSecurities
• Sempra global metals and oil businesses

• Several structured transactions, in particular,
  showcased J.P. Morgans ever-growing leadership
  in commodities
• Strategic fuel hedge programme for the Republic
  of Panama
• Rainfall-contingent power hedge for a South
  American-based utility company
• Expansion of price-making capabilities throughout
  Asia
• Tokyo Commodity Exchange
• Japanese crude cocktail
• Regional crudes
• Agriculture products
• Regional coal
• Regional Power

J . P .   M O R G A N   G L O B A L 
 C O M M O D I T I E S   C R E D E N T I A L S
"What's starting to change are clients' views of
J.P. Morgan. We didn't just flip a switch and
one day it happened. We have been deliberate in
our growth strategy. We are now in parts of the
world that hadn't been a major focus for our
commodities team, such as Central and Latin
America, the Middle East, Africa and Asia. Over
the course of the past few years, our focus in
energy and other commodities has really been
extending beyond financial and flow products to
more physical and structured transactions. -Mike
Camacho, Global Head of Commodity
Sales EnergyRisk June, 2010
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