logi Energy - Larry Ortega CIO/CEO

1. Peak Oil Analysis logi Energy - Larry Ortega CIO/CEO Thoughts on Oil The Thinking Process - December 2009 212 655-4467 larry@logipeakoil.com

2. Analysis Approach - Strategic Steps Oil Price Analysis Oil Price Direction Strategies Positions Position Hedging Portfolio Hedging

3. Oil Price Analysis - The Bases of Direction • Current Global Production • Global Export Modeling • EIA Data Analysis • Detailed Futures Pricing Analysis • Oil Price - Market Effects • Elliott Wave - Fibonacci Analysis • Technical Chart Analysis • Weather Analysis • Industry Insights E&P as well as Transportation Operations Oil Prices: Where are we in the Oscillation Cycle? 5 Person Technical Analysis Team Insights from all 15 Team Members

4. Oil Export Model 2005 On - Peak Oil Analyses Supply and Demand Cross in 2032 “Best Case” (Upper Chart) Oil Supplied by Exports Expected to Drop at roughly 1 MMbpd per year (Lower Chart) Within 2 years, it will drop below World Demand at the Currently Depressed Usage Rates Within 5 years, there will be Fuel Rationing in the US, Europe and Japan Exports SHOULD meet Needs for Next 2 Years Source: Multiple sources compiled by Samuel Foucher and Jeffrey Brown

5. Oil Price: EIA Data Seasonal Effects • Crude Oil and Gasoline beginning Fall/Winter Build at Extreme Highs Inventory only to get worse (Upper Graphs) • Heating Oil Winter Drawdown Starting at 99th %tile. Warm Winter could spell even Higher Inventory • El Nino Strengthening MORE than expected. Crude Oil and Gasoline Reserves Expected to Grow if There is Lack of Use

6. Oil Price: Market Effects - USO, Oil Comm ETF • Slowly Crumbling from Oct High - Biased by Trading Strategy of this ETF • Technical Indicators: Percentage Price Oscillator and Chaikan Money Flow show Weakening Downtrend

7. Oil Price: Market Effects - UNG, Nat Gas Comm ETF • Seasonal Drop from Oct High - Winter Cold Snap causing bounce back, also Biased by Trading Strategy of this ETF • Technical Indicators: Percentage Price Oscillator and Chaikan Money Flow show Lack of Strength Still Downtrend

8. Oil Price: Market Effects - SPY, S&P 500 ETF • Santa Claus Rally Driving into ascending triangle • Technical Indicators: Percentage Price Oscillator showing Uncertainty and Chaikan Money Flow shows Growing Strength Clear Uptrend - But, Hit a Limit by New Years?

9. Oil Price: Market Effects - UUP, US Dollar ETF • Dollar Spikeback - Not Strongly Correlated with Oil or Gas Price, but having an effect - More Correlated to S&P and Gold • Technical Indicators: Percentage Price Oscillator and Chaikan Money Flow show Growing Strength Clear Uptrend

10. Oil Price: Market Effects - GLD, Gold ETF • Market Forces Spiking Gold Down - Not Strongly Correlated with Oil or Gas Price - More Anti-Correlated to Dollar • Technical Indicators: Percentage Price Oscillator and Chaikan Money Flow show Decreasing Strength STRONG Reversal

11. Oil Price: Market Effects - DIG, Oil and Gas Stock ETF • Oil and Gas Stocks Breaking through Bottom of Upward Channel - Bounce back points to lower prices • Technical Indicators: Percentage Price Oscillator and Chaikan Money Flow going strongly negative Down Spike Imminent?

12. Oil Price: Futures Pricing - Crack Spreads - Broken • Gasoline and 3:2:1 Crack Spreads ‘broke down’ in late August with excess storage • Crack Spreads hitting Resistance • Crack Spreads this low means Refinery Margins are thin and trying to rebound with weather and Christmas Driving Crack Spread Leading Indicator of Prices

13. Oil Price: Elliott Wave - Monthly • Tracks Fibonacci Based Elliott Wave Responses Caused by Behavioral Market Responses • Monthly Wave Analysis Expects Price to Drop below Dec08 Low • Expects Succeeding Up Price Move to go up to $300 to $400 per barrel • Elliott Wave Theorists - DO NOT BELIEVE in Peak Oil • Predicted Dow 10,000 S&P 1100 in March 2009 during Low • Elliott Wave most accurate at describing turn 1 to 2 wks after Elliott Wave Predicted $120 or more Oil at High and $45 or less Oil at Low

14. Oil Price: Technical Analysis Oil Price Action Just Below Short Term Support Line 2002 - 2007 Long Term Support - Resistance 2008 - 2009 Short Term Support - Resistance

15. Oil Price: Weather Effects • El Nino Strengthening MORE than expected • El Nino (temp >1deg) was expected to peak at +1.25 deg, now modeled to +1.75 deg • Temperatures MUCH Warmer • El Nino Strengthening MORE than expected • Winter Expected to be warmer through March HO Reserves Expected to Grow with Lack of Use

16. Oil Price: Industry Insights • DOT: Airline Passenger Seat Miles Down -9.3% over Last 2 Years • Trucking Firms reporting -5.2% in Oct09 from Oct08. This was truck Tonnage’s lowest decrement since Nov 2008; Sep 09 was -7.3% from Sep 08. • American Association of Railroads reports Rail Tonnage down -13.7% compared to ‘08 and -18.2% since ‘07 • Dow Jones Transportation Average - Triple Top, Third Top Not as High as Second. No Uptick in Transportation Expected Overage in Supplies not Needed Supplies Will Continue to Build

17. Oil Price - Direction Bias next 6 Months Current Global Production: Down Global Export Modeling: Neutral EIA Data Analysis: Down Detailed Futures Pricing Analysis: Neutral Oil Price - Market Effects : Down Elliott Wave - Fibonacci Analysis: Down Technical Chart Analysis: Possibly Down Weather Analysis: Down Industry Insights E&P as well as Transportation Operations: Down Oil Prices: Where are we in the Oscillation Cycle? Price Seems to be in the Middle Direction Bias Pointing Down - Market Headed Down

18. Contact Larry Ortega Chief Investment Officer logi Energy 212 655-4467 larry@logipeakoil.com This is not an offer to sell any fund or securities. Before you invest in markets, please discuss your decisions with your financial advisor.