Crude oil prices are rebound significantly in last four weeks. We expected Brent prices will rebound and reach USD 50 per barrel in second quarter because of peak season and weak dollar. A steady succession of bearish signs has pushed the oil price down to levels not seen since the early 2000s in fist two month this year. The Chinese stock market sell-off, lifting of Iranian sanctions, sharp increase in US crude oil and product stocks, and initial company reports indicating that US capital expenditure cuts will only marginally affect production have caused a market rout. These prices are not sustainable and we do not subscribe to the rapidly emerging view that markets will not balance until 2017 or later. We continue to believe that the market will balance following declining US production along with a lack of production growth among the other producing countries that are not part of the Organization of the Petroleum Exporting Countries (OPEC). The market is set for a rally but needs positive data as a catalyst, which seems unlikely to appear in the next few weeks. Until this occurs, the market will see prices remain around or slightly below the current level. Despite the price rout, physical balances are improving over last year’s and will continue to do so, even with Iran’s return. Demand growth is currently lower than in 2015, but at 1.2 million barrels (MMbbl) per day it remains strong. Expected lower production growth will help bring about balance in the market later this year. Low prices have again prompted discussions of a possible OPEC emergency meeting. This is highly unlikely given the impending return of Iran’s barrels to the market. We have Dated Brent averaging a projected USD40 per barrel this year, rising to USD36 per barrel in 2017. A key downside risk to our forecast is centered on higher than expected non-OPEC production. Based on DMI forecasts, March and April naphtha prices are projected to be USD 355 and USD 390 per ton CFR Japan.