Recent developments in the oil market have led to pronounced uncertainty about the second half of the year. Year-to-date (y-t-d) at the end of May, crude oil prices are 30% higher than in the same period last year, with ICE Brent averaging above $70/b for the first time since 2014. Draws in crude oil inventories, healthy oil demand and geo-political developments have supported this rising trend. NYMEX WTI futures also rose to average $65.09/b during this time, but were trailing other markets due to high US oil production as well as the strengthening of the US dollar. Recently, crude oil futures have lost some momentum amid uncertainty as traders prepare for potentially more supply returning to the market.
Global economic activity has slowed in 1Q18, with growth below expectations in the major OECD economies. The global growth forecast for 2018 remains at 3.8%, with a pick up expected in the second half of the year, led by the US, whose economic performance will be supported by the fiscal stimulus measures. Moreover, Japan and the Euro-zone are projected to accelerate in 2H18, following a slow start to the year. While the OECD shows upside potential, the major emerging economies will likely slow from relatively higher activity in 1H18. China is expected to continue financial tightening, which combined with monetary measures in the US, could dampen growth in 2H18. India is also forecast to show lower growth in the second half of the year, after a strong recovery during 1H18 Read More
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