Baku, January 27, AZERTAC
The World Bank has slashed its forecast for crude oil prices by $14 to $37 per barrel for 2016, it said on Tuesday, amid growing supply and weak demand prospects from emerging markets, according to Reuters.
In its annual Commodity Markets Outlook, the World Bank lowered its price forecast for 37 of 46 commodities, including oil, saying that weak demand from emerging economies is likely to continue.
World Bank economists said weak demand would continue even as oil supply grows with the resumption of Iranian exports, continued U.S. production and a mild Northern Hemisphere winter.
Oil prices should decline another 27 percent in 2016 after plummeting by 47 percent last year, according to the outlook. The World Bank uses an average of Brent, Dubai and West Texas Intermediate oil, equally weighted.
“Low prices for oil and commodities are likely to be with us for some time,” said John Baffes, senior economist and lead author of the report.
Global benchmark Brent crude LCOc1 was trading around $30.50 a barrel late on Monday while U.S. crude CLc1 dipped just below $30.
World Bank economists said they expect a gradual recovery in oil prices over the course of 2016 but the rebound will be smaller than in previous years that followed sharp declines, including 2008, 1998 and 1986.