MEMORANDUM ON OIL

MEMORANDUM ON OIL

• 1.
  MEMORANDUM 2 Date: February14, 2015 To: Professor Lawrence A. Souza From: Amrutha Rajendra Re: Oil prices to drop by 10% over the next three months We are tracking OIL prices. Based on our research, we forecast the price of oil to drop by 10% over the next three months based on following three factors: Strengthening the US dollar, increased fracking operations in the US and lowering oil demand in U.S and China. We recommend the following 32 trades. Indexes (2) ETFs (3) Stocks (5)  Write Forwards  Sell short  Sell short  Write Futures  Write call options  Write call options  Write call options on futures  Buy put options  Buy put options  Buy put option on futures Trades (8) (9) (15) Tickers: XOI & IYE Tickers: XOP, IEO& PXE Tickers: TOT, OXY, IMO, CVX & SNP Total: 32 trades We are tracking Oil prices. Based on our research, we forecast the price of oil to drop by 10% over the next three months based on following three factors: Strengthening the US dollar, increased fracking operations in the US and lower oil demand in U.S and China . We recommend the previously listed 32 trades.  Stronger dollar makes oil more expensive for buyers using foreign currency.  Many energy companies have found it profitable to extract oil from shale formations, using techniques like fracking & horizontal drilling.  Countries like Indonesia & Iran have been cutting back on subsidies for fuel users.  The market is oversupplied and refineries are expected to enter into a seasonal maintenance. The demand for crude oil, and global inventories continue to decrease.