THE WINDS OF WINTEROIL DEMAND

1

OIL PRICE 2018-2019

40

60

80

100

Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 Apr-19 Jul-19 Oct-19

USD/bbl

$50

ECONOMIC CONCERNSSUPPLY

LOSS

SUPPLY LOSS$100

2

Oct-18

“Supply-driven in 2018. Demand-driven in 2019”

ECONOMIC CRISIS IMPACT ON OIL PRICES

1997 1999

$24.8

$9.6-61%

Tom Yum Gung Crisis

2000 2002

$34.6

$17.2-50%

2008 2009

$146

$36.6-75%

Hamburger Crisis

2018 2019 2020

$86.3

$50.3

-41%

Next Crisis

3

Dot-Com Crisis

Industrial production

World Trade Volume

Manufacturing PMI

-1

1

3

5

7

2015 2016 2017 2018 2019 2020

SLOWEST GROWTH IN ALMOST 10 YEARS

Global Economic Activities Indicators

3.8% 3.6%3.0%

2017 2018 2019

Global GDP Growth

1.81.1 1.0

2017 2018 2019

Oil Demand GrowthUnit: MBD

Source : IMF, IEA (Oct’19)

Unit: % (y-y) 10 years

8years

Manufacturing PMI

4

“SYNCHRONIZED" ECONOMIC SLOWDOWN

2.4% 2.9% 2.4%

6.8% 6.6% 6.1%

Economic Growth : 2017 / 2018 / 2019

Source : IMF (Oct’19)

2.8% 2.2% 1.5%

7.2% 6.8% 6.1%

U.S. China EU India

5

ECONOMIC UNCERTAINTIES STORM IN…

6

Global Investment Growth

0

2

4

6

2017 2018 2019

Advanced Economy

Emerging & Developing

Unit: % Y-Y

Source : IMF (Oct’19)

…SO INVESTMENT GROWTH SLOWS DOWN

0

200

400

2017 2018 2019

Global Economic Policy Uncertainty Index

7

AGING POPULATION STIMULUS ADDICT

3 ROOT CAUSES

WEALTH INEQUALITY

8

AGING POPULATION STIMULUS ADDICT WEALTH INEQUALITY

AGING POPULATION

9

3 ROOT CAUSES: AGING POPULATION

POPULATION: GROWTH SLOWER & OLDER

20-49 50+0-19

201819901970

*4 Biggest GDP countries : US, EU, China, Japan

Global Population Growth Slowest in decades

Population of 4 Biggest GDP CountriesOlder than ever

1960 1972 1984 1996 2008

2.1%

1967

20181.1%

10Source : United Nations, Department of Economic and Social Affairs

3 ROOT CAUSES: AGING POPULATION

POPULATION STRUCTURE PRESSURES OIL DEMAND GROWTH

% GDP Growth% Population Growth% Oil Demand Growth

1958 1978 1998 20181958 1978 1998 2018

11Source : UN, IMF, IEA

AGING POPULATION STIMULUS ADDICT WEALTH INEQUALITY

STIMULUS ADDICT

12

3 ROOT CAUSES: STIMULUS ADDICT

WE HAD SUSTAINED GLOBAL ECONOMY BY STIMULUS

STIMULUSSince 2009

U.S. EU

%

0

1

2

3

4

5

6

2007 2012 2017

US EU

JAPAN

Print Money (QE)more than 12 $Trillion

Reduce Interest Rates Near-Zero

13Source : US Federal Reserves

3 ROOT CAUSES: STIMULUS ADDICT

GLOBAL ECONOMY HAD RECOVERED WELL

STIMULUS

Since 2009

2010

GDP Growth3.9% per year

2017

ECONOMY RECOVERED

2010-2017

14Source : IMF

3 ROOT CAUSES: STIMULUS ADDICT

SO, WE TOOK OFF STIMULUS

NORMALIZATIONECONOMY RECOVERED

STIMULUS

Since 2009 2010-2017 2017-2018

15

3 ROOT CAUSES: STIMULUS ADDICT

THEN ECONOMY SUFFERS, AND NOW WE NEED IT BACK!

NORMALIZATION STIMULUS AGAIN!!ECONOMY RECOVERED

STIMULUS

Since 2009 2010-2017 2017-2018 2019-2020

16

3 ROOT CAUSES: STIMULUS ADDICT

BUT STIMULUS TOOLS ARE RUNNING OUT

0

5

10

15

20

25

1979 1984 1989 1994 1999 2004 2009 2014 2019

U.S. INTEREST RATES (%)

Interest Rates Already Near-Zero

STOCKS REAL ESTATES LUXURIES

THE POORTHE RICH

QE Cause Wealth Gap

17Source : US Federal Reserves

AGING POPULATION STIMULUS ADDICT WEALTH INEQUALITY

WEALTH INEQUALITY

18

3 ROOT CAUSES: WEALTH INEQUALITY

90% OF GLOBAL POPULATION CARRIES MOST DEBT

90%

9%

Global Population

Wealth Share Total Debt ShareSource : Credit Suisse (2019)

HOW CAN ECONOMY PROSPER?

45%

37%

18%

5%21%

74%

1%

19

AGING POPULATION STIMULUS ADDICT

CHANCE FOR SEASON CHANGE?

WEALTH INEQUALITY

20

ECONOMIC ACTIVITIES RETURN AFTER UNCERTAINTIES ALLEVIATE

21

BREXIT

U.S. vs China Trade War

Global Investment GrowthUnit: % Y-Y

0

2

4

6

2017 2018 2019 2020

Advanced Economy

Emerging & Developing

Source : IMF (Oct’19)

CONCLUSION: 2020 STILL STRUGGLE WITH SOME UPSIDE

22

3.8%3.6%

3.0% 3.0%

2017 2018 2019 2020

1.81.1 1.0 1.0

2017 2018 2019 2020

Global Oil Demand Growth

Global GDP Growth

Unit: MBD

2020Oil Demand Growth:

1.0-1.3 MBD

3.4%