December Inflation came in below Vetiva and Consensus expectation of 15.7% y/y and 15.8% respectively, registering at 15.4% y/y (November: 15.9% y/y) despite nationwide fuel shortages that increased average premium motor spirit (PMS) prices by 18% in the month.
We envisage the rebalancing process of the crude oil market would leave 2018 prices stable, albeit slightly lower in H218. Given the interpolation between changes in net supply and Brent crude, we update our crude oil forecast to $55/bbl.-$65/bbl. with a base case of $60/bbl. for 2018.