The rebound in oil prices over the last few months has vindicated our view that oil prices had fallen too far, even if they have bounced back a little more sharply than we had anticipated. We expect stronger demand to help soak up some of the surplus supply of oil over the next few years. However, the removal of subsidies in developing countries, high taxes on oil products in advanced economies and government regulation to improve energy efficiency will prevent demand from surging and prices returning to anywhere near $100 per barrel.
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