Macros in brief for Oil Markets - 2018 Brent is up in 2018 from 66.25 to 71.25. Nymex WTI has risen from 60.10 to 66.60 in the same period. For the past few months there have been more bullish factors than bearish ones supporting a price rise. 1 of 5

Macros in brief for Oil Markets - 2018 Bullish factors: Supply shortage created by the production cuts by OPEC and Non- OPEC producers by cutting 1.8mb/d. They are more likely to continue with the co-operation of limiting their production to 32.5 mb/d most probably till they meet again in June. US producers’ stoppage of production due to extreme weather conditions and huge pipeline outages. Non-OPEC supply growth has been revised marginally lower in 2017 at 0.77 mb/d. 2 of 5

Macros in brief for Oil Markets - 2018 Bullish factors: (Contd).. Venezuela, believed to be the country with one of the largest reserves in the world is embroiled in a chaotic political turmoil leading it close to bankruptcy, affecting their supply quite adversely. Other countries that are vulnerable to geopolitical risks are Libya, Iran and Saudi Arabia. Generally crude oil inventories are seen falling in major economies like US and China. On the demand side a generally optimistic outlook of global growth in major economies of the world could help the demand rise in the current year. Global Oil demand is expected to rise from 96.99 mb/d in 2017 to 98.51 mb/d in 2018 3 of 5

Macros in brief for Oil Markets - 2018 Bearish factors: Ramping up of US shale production is expected to expand further by about 10mb/d but the quantum of their exports also is believed to match the production. Drilling of more wells also point to a possible increase in supply. The price rise in WTI is encouraging investment in further exploration. It is expected that the demand growth would take care of the rising supply. Possible non-compliance of production cuts agreed between OPEC and Non-OPEC countries. Steepest backwardation in four years and record speculators’ longs triggering liquidation. 4 of 5

Macros in brief for Oil Markets - 2018 Unknown threats: Weather related events like cyclone or wild fluctuations in temperature. Wars, Terrorism related damages, political twists and turns. As mentioned in the beginning, the macro picture favours a bullish outlook for the oil.  When a strong bearish info descends on the market the force would be tremendous. 5 of 5