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Inventories cap prices as the market dreams of an OPEC deal, but the fight for market share continues as Big Oil sees margins squeezed Brent closed at $50.95/bbl on 18th August as speculation over an OPEC production freeze lifted prices but inventory builds prompted a retraction to around $49/bbl in late August. We have revised our Brent forecasts lower on weaker prospects for global demand and continued record high inventories. We see global demand growth weakening slightly as the IMF expects lower global GDP growth post-Brexit. Big Oil faces a further squeeze on income as refinery margins weaken due to a products glut, which we see limiting offshore development for the next two years. We remain more sceptical of a ‘shale renaissance’ than other analysts as capital may be constrained in US LTO. Meanwhile, we see the Gulf OPEC members continuing to grow production in a battle for market share, discounting recent talk of a production freeze. As a result we see supply growing slowly in 2016, but recovering higher in 2017.