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We expect oil to hit an inflection point around 3Q16, when inventory drawdowns push the market to consider forward-looking, half-cycle costs of production (above $60/bbl). Lacking a regulator with spare capacity, the lagged effects on supply from unprecedented capex cuts will drive prices much higher by the end of the decade. Here we build upon our analysis from September 2015, Breaking Point: Capitalizing an Oil Glut, and its Consequences to discuss the market tightness exacerbated by increasingly frequent supply disruptions and characterize an investment that combines low-cost base value with leverage to rising prices.

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Greetings, Let us begin with emerging markets. 1. South Africa’s mining production dropped by 18% from a year ago – a record decline. This report sent some analysts back to the drawing board, with growth projections downgraded again. h/t Jonathan 2. Romania and Poland remain in deflation. Will both see stabilization as energy prices move higher? Source: Investing.com

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Greetings, We begin with China where a part of the fiscal stimulus has been orchestrated via the state-controlled China Development Bank (CDB). The bank is known for financing large infrastructure projects. Source: Macquarie As discussed yesterday, China’s recent growth has been fueled by credit. With increased liquidity (injected via stimulus – for example above) and

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