Macro Outlook: Supply issues resurface

Oil prices have rebounded of late, reflecting renewed supply concerns and anticipated stimulatory economic measures in the US and elsewhere. Supply concerns, however, are probably overblown as they were earlier in 2012, while more US quantitative easing is unlikely to have more than a transitory impact on prices and to have little effect on activity. We expect the market to remain in surplus over the rest of 2012, which should dampen the current price rally.