From: Ens, Amanda Sent: Thursday, Apri To: Jeffrey Epstein ([email protected]) Cc: Barrett, Paul 5; Weissend, Renee E Subject: Brent vs WTI =OA =effrey, <=:p> Plea=e find follow-up points below as promised; let us know if you have any que=tions. =o:p> &nb=p; Term structure of brent (backwardation) vs WTI (contango) m=re attractive to go long brent • Supply story more favorable for hi=her brent than WTI prices. Seaway pipeline likely not enough to balance =he supply of WTI in Cushing • Supplies of WTI remain very healthy. North Am=rica retains its primary role in expanding non-OPEC supply, accounting for=82% of the total increase over the last two years. • Flows from the Keystone XL pipeline leading out of Cushing into the G=lf Coast have been delayed, but should start in late 2013 and allow =n additional 700kb/d to leave Cushing. With Seaway currently pumping —30=kb/d from Cushing to the Gulf Coast, Keystone would represent a significan= increase in pipeline capacity. • The Seaway =ipeline in combination with the Keystone XL pipeline will help allev=ate some of the supply building up in Cushing. However, we donR=7;t believe these projects will be sufficient to completely resolve the WT= supply overhang. =OD Brent supply/demand =alances remain tight with OPEC production slowing and Chinese demand growi=g 12 =onth price target: $120/bbl Brent & $105/bbl WTI • = Brent crude prices hav= softened from their February highs, as the global market balance eased on=the back of seasonally weaker product demand, and a diminished pull =n crude as refineries approach a short-term peak in planned maintenance.=o:p> • =0ALooking forward we expect = healthy appetite for crude as refineries return from maintenance, and as =lobal growth continues to improve. Specifically, we see an ongoing=recovery in the U.S., as well as continued structural demand growth fr=m emerging markets. =0A•= = Whil= demand looks supportive, supplies are also seeing