Adjusting Our Outlook

In response to the recent nuclear deal with Iran, we are adjusting our near term crude oil outlook from $50~$70 to $40~$60. The adjustment reflects approximately 1mmb/d of additional supply coming online from Iran in the next couple of years.

US rig count has found a floor while production settled at a higher plateau than March when we last updated our views on the oil market. Prolonged period of sub $70 oil will make it even harder for non-Saudi OPEC members to cut production. Global demand, especially from Asia and Europe, show no sign of short term rally. Despite bullish factors surrounding the Islamic State’s increased activities, we argued in our last update that potential indications of US-Iranian nuclear deal could make things complicated.

Going Forward

We now see that most of the ‘surprise’ bullish factors have receded but our underlying analysis remains unchanged – Oil will continue to trade in a narrow band.


Fig1. US oil output has increased since March. Source: Bloomberg 


Fig2. After a rapid decline, US rig counts have found a floor. Source: Bloomberg


Fig3. Oil will continue to trade in a range. WTI data from Jul 2014 to current. Source: Bloomberg


Disclaimer: Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Syntal Capital Partners, LLC), or any non-investment related content, made reference to directly or indirectly in this newsletter will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from Syntal Capital Partners, LLC. Please remember to contact Syntal Capital Partners, LLC, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. Syntal Capital Partners, LLC is neither a law firm nor a certified public accounting firm and no portion of the newsletter content should be construed as legal or accounting advice. A copy of the Syntal Capital Partners, LLC’s current written disclosure statement discussion our advisory services and fees continues to remain available upon request.


The reflected asset allocation models (Tactical Portfolio) and model sub-component (Strategic Portfolio) compiled by Syntal Capital Partners. (“Syntal”) represent hypothetical back-tested results (see Limitations below) for each asset allocation portfolio during the corresponding time period. Please Note: (1) Syntal currently utilize these asset allocation model and sub-component portfolios in managing actual client assets; and, (2) based upon various factors as discussed below, results may have materially differed from actual client results. Please Also Note: The performance results reflect reinvestment of dividends and the deduction of Syntal’s maximum investment management fee as set forth on the fee schedule disclosed on Part 2A of Syntal’s Form ADV. Per the fee schedule, Syntal’s management fee is based upon a percentage of the assets under Syntal’s management. The percentage fee decreases as the amount of assets increases.

Please Note: Past performance may not be indicative of future results. Therefore, no current or prospective client should assume that future performance will be profitable, equal the performance results reflected, or equal any corresponding historical benchmark index and/or combination thereof. The historical performance results for the indices is provided to assist an individual client or prospective client in determining whether a certain model portfolio meets or continues to meet, his/her investment objective(s) and risk tolerance. Please Also Note: (1) performance results do not reflect the impact of taxes; (2) It should not be assumed that account holdings will correspond directly to any such comparative benchmark index; (3) comparative indices may be more or less volatile than the Syntal model portfolios; and (4) a complete description of each reflected index is available upon request..

For reasons including variances in portfolio account holdings, variances in the investment management fee incurred, the date on which a client engaged Syntal’s investment advisory services, and any account contributions or withdrawals, the performance of a specific client’s account may have varied materially from the indicated hypothetical model performance results.

Hypothetical Limitations: Each reflected asset allocation model (Tactical) and model sub-component (Strategic) reflect hypothetical, back-tested results, that were achieved by means of the retroactive application of a back-tested portfolio and, as such, the corresponding results have inherent limitations, including: (1) the portfolio results do not reflect the results of actual trading using client assets, but were achieved by means of the retroactive application of each of the referenced portfolios, certain aspects of which may have been designed with the benefit of hindsight; (2) back tested performance may not reflect the impact that any material market or economic factors might have had on the adviser’s use of the hypothetical portfolio if the portfolio had been used during the period to actually mange client assets; and, (3) for various reasons (including the reasons indicated above), Syntal’s clients may have experienced investment results during the corresponding time periods that were materially different from those portrayed in the reflected models and sub-components.

In the event that there has been a change in a client’s investment objectives or financial situation, he/she/it is encouraged to advise Syntal immediately. Different types of investments and/or investment strategies involve varying levels of risk, and there can be no assurance that any specific investment or investment strategy (including the investments purchased and/or investment strategies devised or undertaken by Syntal) will be either suitable or profitable for a client’s or prospective client’s portfolio.

All performance results have been compiled by Syntal, and have not been independently verified. Information pertaining to Syntal’s advisory operations, services and fees is set forth in Syntal’s current disclosure statement on Part 2A of Form ADV, a copy of which is available from Syntal upon request.

ANY QUESTIONS: Syntal’s Chief Compliance Officer, Robert J. Carlyon, remains available to address any questions regarding the performance presentation.

Painting by: Jamie Rood