W’Bank Predicts $55p/barrel in Oil 2017

The World Bank has predicted higher prices for industrial commodities, principally energy and metals, in 2017 and next year. However, the Bank in its April Commodity Markets Outlook released recently, held steady its crude oil price forecast for this year at $55 per barrel, but increased it to an average of $60 per barrel in 2018. It anticipated that rising oil prices, supported by production cutbacks by Organisation of the Petroleum Exporting Countries (OPEC) and non-OPEC states, would allow markets to gradually rebalance. But, the World Bank pointed out that its oil price forecasts are subject to downside risks should the rebound in the U.S. shale oil industry be greater than expected. Prices for energy commodities, which also include natural gas and coal, were projected to jump 26 percent this year and 8 percent in 2018. “In line with oil price forecasts, natural gas is anticipated to gain 15 percent this year, led by a jump in U.S. prices. Coal is seen climbing six per cent in 2017, due to earlier supply restrictions in China, which consumes half the world’s coal output. Prices for non-energy commodities, which include agriculture, fertilisers, and metals and minerals, are forecast to increase in 2017, the first rise in five years. Metals prices are projected to jump 16 per cent this year due to strong demand, especially from China, and supply constraints, including mine disruptions in Chile, Indonesia and Peru,” the Bank added.