外文报告：RJ-Quarterly+Global+Energy+Reportr+2Q14-140714

Global Research
Published by Raymond James & Associates

Please read domestic and foreign disclosure/risk information beginning on page 37 and Analyst Certification on page 37.

? 2014 Raymond James & Associates, Inc., member New York Stock Exchange/SIPC. All rights reserved.
International Headquarters: The Raymond James Financial Center
|
880 Carillon Parkway
|
St. Petersburg, Florida 33716
|
800-248-8863
Energy
July 14, 2014
Industry Brief
J. Marshall Adkins, RJA, (713) 789-3551, Marshall.Adkins@http://wendang.chazidian.com
Pavel Molchanov, RJA, (713) 278-5270, Pavel.Molchanov@http://wendang.chazidian.com
Andrew Bradford, CFA, RJL, 403.509.0503, andrew.bradford@raymondjames.ca
Bertrand Hodée, Research Analyst, RJEE, (33 1) 45 64 05 46, Bertrand.Hodee@http://wendang.chazidian.com
Santiago Wesenack, CFA, RJ LatAm, (54 11) 4850-2537, Santiago.Wesenack@http://wendang.chazidian.com.ar


Energy: Quarterly News ____________________________________________________________________________________


Raymond James Quarterly Global Energy Report for 2Q14


This quarterly report aggregates energy research highlights from Raymond James & Associates as well as our international
teams: Raymond James Ltd. (Canada), Raymond James Euro Equities, and Raymond James Latin America.
Quarterly Highlights
Crude Oil
Both Brent and WTI were quite strong in 2Q14, especially in June, propelled by a widening risk premium amid
the insurgency crisis in Iraq. The 2Q14 averages came in at $110/Bbl for Brent and $103/Bbl for WTI. For
context, the 1Q averages were $109/Bbl and $99/Bbl, respectively. The price spread between WTI and Brent
narrowed further in 2Q, as the continuation of inventory drawdowns at Cushing placed upward pressure on
WTI relative to Brent. With Iraq adding to the oil market’s existing concerns about Iran, Libya and other
wildcards, we believe the overall geopolitical uncertainty will contribute to an above-average risk premium in
oil prices. While we still think that the global supply/demand balance will eventually loosen, in June we raised
our 2014 and 2015 price forecasts. Our Brent forecast for both years is $110. Our WTI forecast is $102 for
2014, declining to $85 for 2015 as we envision the WTI discount widening sharply toward the end of 2015 – in
the absence of further reforms to the U.S. crude export ban (above and beyond the condensate ruling).
Natural Gas
Following a notably cold winter in much of North America, natural gas withdrawal season concluded with U.S.
storage at historically low levels. Accordingly, Henry Hub prices surged in 1Q14 to average $4.95/Mcf, the
highest quarterly average since 1Q10. Since then, volatility has diminished as gas prices seasonally edged
down. The 2Q average came in at $4.67/Mcf. We expect prices to remain meaningfully higher compared to
last year in order to incentivize enough incremental production to refill storage to sufficient levels as 2014
progresses. Our 2014 forecast for Henry Hub is $4.77/Mcf, and in May we raised our 2015 forecast to
$4.25/Mcf.
Stocks
During 2Q14, broader U.S. markets edged higher into record territory amid a mostly subdued, low-volatility
environment for equities. The S&P 500's 4.7% gain added to its 1.3% gain from 1Q. Energy was the clear
standout in 2Q, with the aforementioned strength in oil prices helping propel stocks higher even as North
American gas prices cooled off. The two broadest energy subsector indices, E&P and oil service , handily
outperformed the S&P with gains of nearly 15% – in contrast to their modest underperformance in 2013. See
the chart on page 3 for details on the performance of various energy indices.
frank_wy_leung11@hkma.gov.hk First Last 07/14/14 01:58:31 PM Hong Kong Highpower