New Challenges in the High Stakes World of Oil Trading

CHAIR Albert Helmig - Chief Executive Officer Grey House

Christopher Bake - Member of the Executive Committee and the

Head of Origination Vitol

Fereidun Fesharaki - Chairman FGE

Pierre Andurand - Chief Investment Officer and Managing Partner

Andurand Capital

Albert Helmig

Chief Executive Officer Grey House

New Challenges in the High Stakes World of Oil Trading

Prompt Prices, Brent & WTI

80.00

85.00

90.00

95.00

100.00

105.00

110.00

115.00

120.00

125.00

130.00

ICE Brent

Nymex WTI

Combined Open Interest and Volume

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

DME Oman Daily Open Interest

ICE Brent Daily Open Interest

ICE WTI Daily Open Interest

NYMEX Brent Daily Open Interest

NYMEX WTI Daily Open Interest

DME Oman Daily Volume

ICE Brent Daily Volume

ICE WTI Daily Volume

NYMEX Brent Daily Volume

NYMEX WTI Daily Volume

NYMEX WTI Open Interest vs. Prompt Price

$0

$20

$40

$60

$80

$100

$120

$140

$160

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

2,000,000

Nymex WTI Total Open…Nymex WTI Prompt Price

ICE Brent Open Interest vs. Prompt Price

$0

$20

$40

$60

$80

$100

$120

$140

$160

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

ICE Brent Total Open Interest

ICE Brent Prompt Price

74

77

80

83

86

89

92

95

98

101

104

Nov '14 Nov '15 Nov '16

($/bbl)

Contract Delivery Month

Last YearYear AgoOct 15

NYMEX WTI Forward Curves

ICE Brent Forward Curves

80

84

88

92

96

100

104

108

112

Nov '14 May '15 Nov '15 May '16 Nov '16 May '17

($/bbl)

Contract Delivery Month

Two years Ago

Last Year

Oct 15

$80/bbl – Should we be surprised?

Chris Bake

Member of the Executive Committee and the

Head of Origination

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

Ja

n-

14

Fe

b-

14

Ma

r-14

Apr-

14

Ma

y-

14

Ju

n-

14

Jul-

14

Aug-

14

Sep-

14

Oct-

14

IEA

OP

EC

US

DO

E

2015 Forecast

Overly high expectations: demand growth has been consistently

overestimated - and continues to be so?

IEA Forecast Oil Demand Growth 2014 (Mln b/d)

Efficiency gain in

US new car fleet

18%

Fall in European

and North

American gasoline

consumption

(2004-2014)

1m/bpd

More expensive to

burn fuel oil than

coal or gas (Btu)

c50%

Saving in fuel burn

per seat in new

planes

(A380 / Boeing

787)

≤20%

Efficiency gains and alternative fuel sources are reducing

consumption of crude based fuels

≤25% increase in vessel efficiency

$100 /bbl engendered efficient behaviours

− slowing down

− focus on trim and minimising drag

In China, gasoil demand growth has been falling for the past four yearsChina: Gasoil demand growth (Mln b/d / Yr/Yr / 3 Month Rolling Mean)

-0.2

-0.1

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

J-1

0 M M J S N

J-1

1 M M J S N

J-1

2 M M J S N

J-1

3 M M J S N

J-1

4 M M J

Shale is outperforming expectations - increased new production per

rig dramatically lowering cost per barrel

Bakken: Number of rigs and new production per rig

-

100

200

300

400

500

600

Jan

-11

Mar

-11

May

-11

Jul-

11

Sep

-11

No

v-1

1

Jan

-12

Mar

-12

May

-12

Jul-

12

Sep

-12

No

v-1

2

Jan

-13

Mar

-13

May

-13

Jul-

13

Sep

-13

No

v-1

3

Jan

-14

Mar

-14

May

-14

Jul-

14

Sep

-14