Investment Rating - The report indicates a cautious outlook on global economic growth, with a projected downshift in GDP growth to 1.4% annualized rate in the second half of 2025, the slowest pace in over three years [2][3]. Core Insights - Global GDP growth is expected to slow significantly, influenced by various factors including trade tensions, labor market softening, and geopolitical risks, particularly in the Middle East [3][11]. - The report highlights a potential recession risk, with a 40% probability of a US/global economic recession due to household purchasing power pressures and business sector retrenchment [3][15]. - Inflation dynamics are shifting, with US core CPI inflation anticipated to accelerate towards a 4% year-over-year pace, while Euro area inflation is expected to drop to 2% [2][11]. - The report emphasizes the importance of monitoring global services PMI and business expectations as indicators of economic resilience [14]. Summary by Sections Global Economic Outlook - Global GDP growth is projected to be 2.3% in 2025, with a significant slowdown anticipated in the second half of the year [33]. - The report notes a 0.7 percentage point reduction in global GDP growth due to rising oil prices and geopolitical tensions [17]. Trade and Tariffs - The impact of tariff-related growth impulses is being felt, particularly in the global goods sector, with a noted decline in manufacturing output and softening goods demand [4][11]. - The report discusses the limited pass-through of tariff hikes to US inflation, suggesting that firms are currently absorbing the costs [12]. Regional Insights - In Asia, the report indicates that while some countries are experiencing growth, the overall sentiment is cautious due to trade policy uncertainties and potential impacts from rising oil prices [29]. - The report highlights that China is expected to see a moderation in growth, with a revised GDP forecast of 3.5% annualized rate for Q2 2025 [28]. Central Bank Policies - The Federal Reserve is expected to respond to labor market weaknesses with cautious easing, while other central banks, such as those in Scandinavia, are also leaning towards easing monetary policy [19][20]. - The report anticipates that the Bank of Japan will continue its quantitative tightening, with a focus on reducing its holdings of government bonds [23].

Investment Rating - The report maintains a cautious investment rating for the oil industry, with Brent/WTI oil price forecasts set at $60/$56 for the remainder of 2025 and $56/$52 for 2026, which are below the forwards by $4 and $8 respectively [4][8][32]. Core Insights - The price drag from higher Iran supply assumptions and slightly higher than expected OECD commercial stocks offsets the price boost from higher GDP forecasts [3][4]. - Global oil demand growth forecasts for Q4-Q4 have been raised by 0.3mb/d and 0.1mb/d for 2025 and 2026, now projected at 0.6mb/d and 0.4mb/d respectively [5][6]. - The report nudges up Iran's crude supply expectations for 2025H2-2026 to 3.6mb/d, reflecting potential progress on a US-Iran nuclear deal, although the outlook remains uncertain [12][13]. Summary by Sections Oil Price Forecasts - The report maintains Brent/WTI oil price forecasts of $60/$56 for 2025 and $56/$52 for 2026, indicating a cautious outlook due to supply factors [4][8][32]. - The price forecasts have been adjusted slightly upward for May, June, and July 2025 due to a faster-than-expected recovery in risk premiums following the US-China trade deal [6]. Demand and Supply Dynamics - Global oil demand growth is expected to be sluggish, with a forecast of 0.6mb/d in 2025 and 0.4mb/d in 2026, driven by lower tariffs and higher GDP [5][10]. - The report anticipates surpluses of 1.0mb/d and 1.5mb/d in 2025 and 2026 respectively, indicating a potential imbalance in the oil market [30]. Geopolitical Factors - The report highlights the uncertainty surrounding US-Iran relations and the potential impact on Iran's crude supply, which could increase if a nuclear deal is reached [12][13]. - Venezuela's supply forecast has also been nudged up based on higher-than-expected realized production [16]. Economic Scenarios - The report outlines various scenarios for oil prices, indicating that downside risks remain significant due to high spare capacity and potential global economic slowdowns [19][20]. - In a scenario of a global GDP slowdown and a full unwind of OPEC cuts, Brent prices could fall to $40 by late 2026 [23][21].