The recovery in oil prices has now taken Brent above our end-2016 forecast of $45 per barrel. We would not be surprised to see the rally pause for breath soon, but remain comfortable with our view that prices will recover further – to around $60pb – by the end of 2017. What’s more, the recovery is consistent with the big picture of constrained supply, recovering demand and improving sentiment that we expect to lift many commodity prices over the coming years. This is good news for equities, especially in emerging markets (EMs), but also carries risks for bond investors and US dollar bears.
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