Energy Preference: neutral : Brent (24 Oct): USD 109/bbl (last month: USD 111/bbl) Recommendations UBS View (crude oil) Brent 6-month target: USD 105-110/bbI | Tactical (6 months) ¢ Growing fear over an escalation of the Syrian civil war, involving Turkey, allowed crude oil prices to move ¢ OPEC is in a good position to balance the higher again. While Syria's crude oil exports already dropped to near zero due to international sanctions, oil market, which should limit the price the oil market's concerns relate to the Kirkuk—Ceyhan oil pipeline (Iraq-Turkey — capacity of 0.4mbpd) and weakness. Along with central banks’ the crude exports from the Turkish port of Ceyhan, around 70km from the Syrian border. support and with the geopolitical risks _tneesp we believe ek Syria ae Vala ae not nieresiee in seiatet | confrontation, a se of Speke oil remaining, we believe that the potential ows from Iraq via Turkey would curb g oba incremental crude oi supply in 4Q12 by more than 50%. It downside for the oil price has declined, would also tighten up the market balance in early 2013 and put additional pressure on the structurally low . ; ee ; thereby warranting allocation. spare capacity in the crude oil market. Strateqic (3-5 e In the absence of a further escalation, which remains our base case, ebbing news related to Syria-Turkey is rategic (3-5 years) likely to ease supply concerns. This should keep the market focus on weak demand growth and strong * We regard the long end of the forward crude oil output from North America, allowing the Brent price to temporarily reach USD 95/bbl. Sars I crude oil as mispriced. To satisfy e A weaker USD, reduced economic tail risk for Europe, ongoing social turmoil in the Middle East and emerging market demand in the long run, North Africa and the risk that the Iranian topic heats up again after the US presidential elections are likely prices around USD 90-95/bbl are unlikely to keep the Brent price around USD 105-110/oz in 6 months. to secur