<table><tr><th>From:</th><th>Daniel Sabba &lt;alb </th></tr><tr><td>Sent:</td><td>Tuesday, February 3, 2015 2:50 AM</td></tr><tr><td>To:</td><td>jeffrey E.</td></tr><tr><td>Cc:</td><td>Vahe Stepanian</td></tr><tr><td>Subject:</td><td>FW: EOD Commodities Note - 2 Feb [C)</td></tr></table>

Classification: Confidential

Crude trading update.<=:p>

Prateek Jain
Sent: Monday, February 02, 2015 4:32 PM
Subject: EOD Commodities Note - 2 Feb

Oil

Very interesting price action today. For those of yo= that wonder why faltprice rallied 3%, yes prompt spreads sold off, yet h2=15 and 2015 spreads were strong, here is my attempt at an answer. The refi=ery strike news on a first look was bearish US crudes. Yet we rallied flatprice wise. The reason is that we ar= in the midst of a giant stopout since Friday. And product prices strength=ning affect worldwide margins etc and thus, BRE linked crudes got a bid fr=m products. Gasoline/BRE cracks were up over 1$ and HO cracks were up a similar amount; and spreads were b=d as well, so this was a product strength driven rally in the cracks. I th=nk this pulled BRE up which obviously pulled WTI up. But refinery outage s=ecific spreads did selloff like CLHSCLMS which is what you'd expect. There also was some producer he=ging in the broker market I saw. Which explains the H2 2015 and call6 spre=d rallies! But interestingly, flatprice was relentless in spite of thisr:=30;This seems bullish to me. In the N SEA, the window was mixed. Forties schedule did come out and shows 426kbd, up 8=kbd. So this definitely took its toll on the prompt BRE spreads. However, =e are still awaiting total BFOE numbers, and don't forget that Osebe=g was down. Another interesting thing was that Iraqi Jan loadings down 300kbd to 3.6M versus Dec of 3.9. Tha l7;s interesting. Iraq has set high goals for Feb exports, let's see=if it can achieve 3.3M of Basrah exports (a 730kbd gain from January sched=le)...

Oil Vols

The overnight rally and the big intraday move in oil=brought back gamma buyers and prompt vols were well bid at the
open even a= crude traded unchanged for the day. And finally Brent rallied more than W=I, prompting better bids in
Brent vol compared to WTI. Jun15 vol spread narrowed by 0.55 vol at the close an= still looks as an attractive sell to me..
We saw a couple of big buyers o= Brent Jun 55 puts.. Interestingly backend vols in WTI stayed soft.. we sa= a few atm
call rolls go through, specifically in WTI Z5/Z6 with interest in buying Z5 vol vs Z6..

&=bsp; &nbs=; =nbsp; WTI (/change) &=bsp; &nb=p; BRE (/change)=/span>

<table><tr><th>H15</th><th>&amp;nbs=;</th><th>=nbsp;</th><th>&amp;nb=p;</th><th>58.20%</th><th>+1.50%</th><th>&amp;nb=p; 52.75%= +6.20%</th></tr><tr><td>M15</td><td>&amp;nbs=;</td><td>=nbsp;</td><td>45.50%</td><td>+0.65%</td><td>&amp;n=sp;</td><td>= 39.70% +1.20%</td></tr><tr><td>Z15</td><td>&amp;=bsp;</td><td>&amp;nbs=;</td><td>32.80%</td><td>-0.25%</td><td>=nbsp;</td><td>3=A0% +0.35%</td></tr><tr><td>Z16</td><td>&amp;nbs=;</td><td>&amp;=bsp;</td><td>24.25%</td><td>-0.40%</td><td>=nbsp;</td><td>&amp;nb=p; 23.50% +0.30%</td></tr></table>

Base Metals

<table><tr><th>3m Ms</th><th>&amp;nb=p;</th><th>=nbsp;</th><th></th><th colspan="2">dod change&amp;nbs=;</th><th>support</th><th>=</th><th colspan="2">&amp;=bsp; resistance</th></tr><tr><td>Al $1872</td><td>&amp;n=sp;</td><td>=</td><td>+$8</td><td>=nbsp;</td><td>&amp;nb=p;</td><td>$1850</td><td>=nbsp;</td><td>&amp;n=sp;</td><td>$1900</td></tr><tr><td>Cu $5500</td><td>&amp;n=sp;</td><td>=</td><td>+$5</td><td>=nbsp;</td><td>&amp;nb=p;</td><td>$5400</td><td>=nbsp;</td><td>&amp;n=sp;</td><td>$5500</td></tr><tr><td>Zn $2124</td><td>&amp;n=sp;</td><td>=</td><td>-$1</td><td>&amp;nbs=;</td><td>&amp;=bsp;</td><td>$2100</td><td>&amp;nbs=;</td><td>=nbsp;</td><td>$2200</td></tr><tr><td>N $15,260</td><td>=nbsp;</td><td>&amp;nb=p;</td><td></td><td>+$95</td><td>&amp;nb=p;</td><td>$15,000</td><td>&amp;nbs=;</td><td>=nbsp;</td><td>$15,500</td></tr><tr><td>Pb $1850</td><td>&amp;n=sp;</td><td>=</td><td>-$9.5</td><td>&amp;n=sp;</td><td>$1850</td><td>=</td><td>&amp;n=sp;</td><td colspan="2">&amp;nbs=; $2000</td></tr></table>

The base complex started the day under pressure from=weak PMI data from China over the weekend but rallied at 10:30 due to a sp=ke in the oil price. Speculators are hoping that the weak Chinese PM= data will induce some stimulus from Beijing. Positive news from Europe was overshadowed by concerns over Greece. =edge funds and money managers increased their bearish positions on copper =o a 4 month high leaving the market exposed to a potentially large short c=vering rally if better news starts coming out of China (especially news on stimulus). The IA' (International A=uminum Institute) has stopped reporting on global aluminum stocks as=they do not consider the data to be an accurate reflection of inventories.=nbsp; Sumitomo Metal Mining Co, Japan's biggest nickel producer expects a deficit in 2015 as ore stockpiles in China run o=t towards the middle of the year

Shanghai Aluminum on warrant stocks are down 1=12% to 54.8 kMT. LME Aluminum on warrant stocks are flat at 1731.6 kMT. Sh=nghai Copper on warrant stocks are down 0.26% to 37.6 kMT. LME Copper stoc=s are up 0.86% to 226.9 kMT. LME Nickel stocks are up 0.39% to 313.6 kMT.

Copper Vols are unch, Ali Vols are down 0.56%, Nicke= Vols are down 0.54%, Lead Vols are unch Zinc Vols are unch

Upcoming data

01/2/15-Chinese Manufacturing PMI- Sury 50.2, Act=al 49.8, Prior 50.1

02/2/15-HSBC Chinese Manufacturing PMI- Sury 49.8= Actual 49.7, Prior 49.8

02/2/15-Markit Eurozone Manufacturing PMI- Sury 5=, Actual 51, Prior 51

2/2/15-US Personal Income- Sury 0.2%, Actual 0.3%= Prior 0.4%, Revised 0.3%

2/2/15-US Personal spending- Sury -0.2%, Actual -=.3%, Prior 0.6%, Revised 0.5%

2/2/15- Markit US Manufacturing PMI- Surv 53.7, A=tual 53.9, Prior 53.7

Regards,

Prateek

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