Macro Outlook: Market backdrop still bearish

Oil prices have recovered some lost ground since the plunge of August and September driven by optimism that the sovereign debt crisis can be contained. Although a financial meltdown will probably be avoided, the macroeconomic outlook remains challenging in the OECD and is deteriorating in the developing world. The upshot is likely to be weaker near- to medium-term oil demand growth than is expected by the bulls and a subdued trend in prices.

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