1. Oil, Traders & China
Mr. Mohsen Ziya

2. China Economy Outlook
Following strong 2Q GDP, China has entered Q3 on a softer note, albeit temporarily
Economy growing at moderate but steady pace
Government focus remains on corporate deleveraging with improved balance sheet

4. China Economy Outlook
China will hold its stance on North Korea & market reactions have been limited
Manufacturing PMI has remained steady whilst electricity consumption has surged
China’s foreign currency reserves have increased to $3,081 tr for the 1st 7 months

6. WTI, Brent & Shale Trading remains range bound;
WTI year end target $50+/bl & $55/bl in 2018
Wider Brent with larger 3 month future & cash price difference
International Energy Agency (IEA) & US Energy Information Administration (EIA) are bullish on increased WTI prices
Separately, China’s import continues to increase whilst world production is contracting

9. WTI, Brent & Shale
WTI prices is in contango where future price is trading above cash contracts. This will reverse over time and is due to US refinery disruptions caused by weather disruptions
Higher cost of financing will increase breakeven costs for shale producers thus keeping WTI above USD 50/bl

12. Traders Challenges
Consumers and larger trades can ride the price fluctuations
Mid to small traders face significant challenges by higher cost of capital, market volatility, geopolitical impacts on transportation and supply availability
Any small market correction will have significant impact on mid distillers and physical traders profitability