Investment Rating - The report does not explicitly provide an investment rating for the industry discussed Core Insights - Oil prices have rallied sharply, and the forward curve has shifted, indicating potential for higher prices depending on disruptions in oil flows [46] - Developed Markets (DM) may not experience significant impacts on core inflation from rising oil prices, while Emerging Markets (EM), particularly Asia, are more exposed [46][12] - Asia's oil burden is currently lower than historical averages, and inflation and current account balances are benign, suggesting that oil prices need to rise sustainably above $85/bbl for central banks to delay rate cuts [18][46] - The report draws parallels between current economic conditions and the early 1990s, suggesting defensives may continue to perform well in European equities [46][25] Oil Market Analysis - The disappearance of contango beyond month 6 indicates a significant shift in oil market dynamics [5] - A $10 increase in oil prices is estimated to lead to a 0.4 percentage point increase in Asia's headline inflation and a -0.4 percentage point impact on GDP [14][16] - The report emphasizes that oil prices will need to rise above $85/bbl in a sustained manner to influence central bank policies in Asia [18][20] Credit Market Insights - High Yield (HY) Energy has seen a strong rebound since early May, with HY Energy trading wider compared to the broader HY market [39][42] - The report recommends a defensive investment strategy, focusing on higher quality assets within the HY Energy sector [44][46]