World Bank raises oil price forecast

23 Jul 2015
Financial Nigeria

Summary

The Bank is cautiously optimistic stating that prices would still be nowhere near 2014 levels.

An offshore oil rig

The World Bank has raised its oil forecast for 2015, from its initial estimate of $53 in April, to $57 per barrel. This follows a 17 per cent rise in crude prices in the second quarter of 2015.

According to the World Bank's latest Commodity Markets Outlook, a quarterly update on the state of the international commodity markets, while crude prices rose 17 per cent in Q2, natural gas and coal declined by 13 percent and 4 percent, respectively, over the same time period. Other commodities, including metals and agricultural products also saw a decline in prices.

Despite the rebound in the price of oil, the Bank is cautiously optimistic stating that prices would still be nowhere close to 2014 levels. In a statement on Wednesday, the global financial institution stated that natural gas prices are projected to decline across all three main markets, namely, United States, Europe, and Asia.

As the Organization of Petroleum Exporting Countries (OPEC) continues to increase output, in the hopes that non-members like the U.S. and Russia would cut production, energy prices would remain pressured. Brent crude traded at $57 per barrel on Wednesday.

Apart from its latest oil forecast, the World Bank reported that non-energy prices will average 12 percent below 2014 levels this year.


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