Published: July 29, 2016 |

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The World Bank offered some respite to non-Opec oil exporters on Wednesday by upping its oil price forecast for 2016.

The bank increased its projection to US$43 from US$41 due to supply disruption and buoyant demand in the second quarter.

Oil prices jumped 37 percent in the second quarter of 2016 due to factors including wildfires in Canada and sabotage of oil infrastructure in Nigeria.

The bank said the forecast nevertheless took account of lower demand in the last few weeks and recovering supplies.

The bank’s senior economist, John Baffes, said: “We expect slightly higher oil prices for the second half of 2016 as oil market oversupply diminishes.”

Despite the recovery of oil and many other commodity prices in the second quarter, most commodity indexes tracked by the World Bank are expected to decline this year, according to its Commodity Markets Outlook.

It attributes the trend to persistently elevated supplies, and in the case of industrial commodities — including energy, metals, and agricultural raw materials — weak growth prospects in emerging market and developing economies.

But the bank said it expected most of the declines to be smaller than expected in the April outlook.

Energy prices, which include oil, natural gas and coal, are due to fall 16.4 percent in 2016, a more gradual decline than the 19.3 percent drop anticipated in April.

The price of a barrel of Brent crude fell 0.20 percent to US$44.78 on Wednesday while a barrel of US light crude gained 0.35 percent to US$43.07.

Source: (July 28, 2016) Proactive Investors

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