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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%