14. THE IRAN IMPACT
• EIA BELIEVES IRAN HAS THE TECHNICAL CAPABILITY TO RAMP UP CRUDE OIL
PRODUCTION BY AT LEAST 700,000 BBL/DAY (BBL/D) BY THE END OF 2016. (EIA
SHORT-TERM ENERGY OUTLOOK)
• IRAN’S OIL PRODUCTION REMAINED AT 2.8 MB/D, WITH CHINA AND INDIA
EMERGING AS THE COUNTRY’S TOP IMPORTERS. IRAN IS EXPECTED TO TARGET
THESE COUNTRIES WHEN SANCTIONS ARE LIFTED. (WORLD BANK COMMODITY
MARKETS OUTLOOK – JUL 22, 2015)
17. US EIA FORECAST (JUL 2015)
If a comprehensive agreement is reached, EIA estimates that the
re-entry of more Iranian oil could result in a $5/b-$15/b lower
baseline STEO price forecast for 2016.
18. INTERNATIONAL ENERGY AGENCY REPORT
• NON-OPEC SUPPLY AS A WHOLE, AFTER EXPANDING BY A
MASSIVE 2.4 MB/D IN 2014, LOOKS ON TRACK TO SLOW
TO 1 MB/D IN 2015 AND STAY FLAT IN 2016. DEMAND
GROWTH, MEANWHILE, IS PROJECTED TO REACH
1.2 MB/D IN 2016. (IEA OIL MARKET REPORT – JUL 10,
2015)
19. • WE EXPECT OIL PRICES TO BE CAPPED AT C.USD 55 (FOR A BARREL OF WTI) FOR
THE FIRST HALF OF 2015. ONCE PHYSICAL MARKETS BEGIN TIGHTENING IN 2016
WE ANTICIPATE PRICES STARTING TO NORMALISE TOWARDS THEIR LONGER-RUN
INCENTIVE PRICE LEVEL, WHICH WE SEE AT AROUND USD 65. HOWEVER, ANY
PRICE NORMALISATION WILL LIKELY BE GRADUAL CONSIDERING THE BY-THEN
LARGE INVENTORY OVERHANG FROM THE 2014/15 EPISODE. (FEB 17, 2015)
21. A WORD OF CAUTION FOR FUTURES TRADERS
• STATISTICS TELL THAT 90% OF TRADERS LOSE!
• EXPERIENCED TRADERS RECOMMEND THE TARGET FOR THE FIRST YEAR SHOULD
BE NOT TO LOSE YOUR MONEY! (RATHER THAN AMBITIOUS TARGETS OF 50%,
100% OR 200% RETURN)
22. FURTHER TRADING TIPS AND PRECAUTIONS
• INVEST ONLY SPARE MONEY (ONE THAT YOU WOULD NOT COUNT ON
FOR THE NEXT 6 MONTHS)
• AVOID OVEREXPOSURE: HAVE ENOUGH MARGIN THAT THE ACCOUNT IS
NOT WIPED OUT EVEN IF OIL DROPS TO $15/B
• LIMIT LOSSES: OPERATE WITH STRICT STOP LOSSES
• LOCK-IN SMALL PROFITS: MOVE TAKE-PROFIT POINT UPWARD IN UP-
TREND
23. TRADING STRATEGY: ENTRY AT $45
WHY $45:
• WITHIN $3 OF 5-YEAR-LOW
• LEVEL HAS BEEN CROSSED TWICE DURING RECENT FALL, BUT PRICE
REBOUNDED WITHIN DAYS
• JUST BELOW EIA AVERAGE PRICE FORECAST FOR 2015, 2016, EVEN WITH
IRAN ACCOUNTED FOR.
INVESTMENT AMOUNT: 15% OF TOTAL AVAILABLE FOR TRADING
24. TRADING STRATEGY: ADD AT $40
WHY $40
GOLDMAN SACHS IN JAN 2015 PREDICTED OIL NEEDED TO TRADE IN $38-
$40 RANGE FOR MOST US RIGS TO BE UNAFFORDABLE. THE BANK
REDUCED ITS 6 MONTHS FORECAST TO $39 AND 12 MONTHS FORECAST
TO $65, THEN.
HTTP://WWW.BLOOMBERG.COM/NEWS/ARTICLES/2015-01-12/GOLDMAN-SEES-
NEED-FOR-40-OIL-AS-FORECAST-FOR-OPEC-CUT-ABANDONED
INVESTMENT AMOUNT: 15% OF TOTAL AVAILABLE FOR TRADING
25. TRADING STRATEGY: ACCUMULATE AT $35
WHY $35
WILL BE UNAFFORDABLE FOR ALL OTHER THAN OPEC COUNTRIES TO
PRODUCE. MAY HAPPEN IF OPEC EXHIBIT MORE AGGRESSION STRIVING TO
REGAIN LOST MARKET SHARE, OR IN CASE OF A CRASH-LIKE FALL
POSSIBLY TRIGGERED BY FURTHER WEAKNESS IN DEMAND, CHINESE STOCK
MARKET CRASH OR GEO-POLITICAL CONCERNS.
INVESTMENT AMOUNT: 25% OF TOTAL AVAILABLE FOR TRADING
26. QUOTE OF THE WEEK
• THE ONLY TRUE WISDOM IS IN KNOWING YOU KNOW NOTHING -
SOCRATES
