Crude Material World Bank Raises 2017 Oil Price Forecast

The World Bank is raising its 2017 forecast for crude oil prices to $55 per barrel from $53 per barrel as members of OPEC prepare to limit production after a long period of unrestrained output.

Energy prices, which include oil, natural gas and coal, are projected to jump almost 25 per cent overall next year, a larger increase than anticipated in July. The revised forecast appears in the World Bank’s latest Commodity Markets Outlook. Oil prices are expected to average $43 per barrel in 2016, unchanged from the July report.

“We expect a solid rise in energy prices, led by oil, next year,” said Senior Economist and lead author of the Commodity Markets Outlook, John Baffes. “However, there is considerable uncertainty around the outlook as we await the details and the implementation of the OPEC agreement, which, if carried through, will undoubtedly impact oil markets.”

A modest recovery is projected for most commodities in 2017 as demand strengthens and supplies tighten. Metals and minerals prices are expected to rise 4.1 per cent next year, a 0.5 percentage point upward revision due to increasing supply tightness. Zinc prices are forecast to rise more than 20 per cent following the closure of some large zinc mines and production cuts in earlier years.

The World Bank’s Commodity Markets Outlook is published quarterly, in January, April, July and October. The report provides detailed market analysis for major commodity groups, including energy, metals, agriculture, precious metals and fertilizers. Price forecasts to 2025 for 46 commodities are presented along with historical price data.

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