Chart 34: Real Brent prices are at one of the lowest levels in decades, Chart 35: We see global light sweet crude oil averaging US$55 to and will likely encourage very strong demand growth ahead US$75/bbl over the 2016-2020 period 440 Real and nominal yearly average Brent crude oil prices 410 Medium term oil supply & demand (2016-2020) US$/bbI avg oil price 120 100 4 (US$/bbl) 100 90 80 80 60 70 60 40 v7 50 20 2016YTD 40 nitbpd growth, 2016-20 0 2 3 4 5 6 7 8 9 10 70 73 76 79 82 85 88 91 94 97 00 03 06 09 12 15 —— supply (OPEC 2.9): low == supply (OPEC 4.2): base* —— nominal oil price ———real oil price, rebased to 2016YTD price level supply (OPRG 3):high comand Source: BP, Bloomberg, BofA Merrill Lynch Commodities Research Source: IEA, BofA Merrill Lynch Commodities Research *4.2 mn b/d OPEC supply: Saudi: 1.3 mn b/d; Iraq: 0.8 mn b/d; other OPEC crude: 1.7 mn b/d; 0.4 mn b/d OPEC NGLs. Non-OPEC production will not reach 2015 levels before 2020 at the earliest... Non-OPEC producers have massively reduced capex spending, down US$290bn or 42% from 2014 to 2016, in response to the low price environment. Should capex start to increase again in 2017, the effect on non-OPEC non-shale production is unlikely to be felt before 2020 at the earliest. Most of the decline in the short term comes from non- conventional output in the US, as shale is very price sensitive within a 12-month horizon. With Brent prices set to increase from US$46/bbI this year to US$80/bbI in 2020 in our base case, we believe US shale production will grow again, albeit at a slower rate than in the past four years. Total non-OPEC supply is set to drop to 56.4mn bpd in 2017 before rebounding to 57.5 mn bpd in 2020, a similar level as in 2015. Chart 36: With Brent prices set to increase to US$80/bbl in 2020, we Chart 37: Linking this with our 5-year price deck suggests marginal US believe US shale output will grow again, albeit at a slower rate shale output grows in 2017 and acceleration thereafter 30 Non-