The World Bank raised its 2016 forecast for crude oil prices to $43 a barrel from $41 a barrel previously forecasted in April, according to the World Bank’s latest Commodities Markets Outlook. Among key reasons, the institution cited supply outages and robust demand in the second quarter.
“We expect slightly higher oil prices for the second half of 2016 as oil market oversupply diminishes,” said John Baffes, Senior Economist and lead author of the Commodities Markets Outlook. “Downside risks to the energy price forecast include higher-than-expected output and further weakening in EMDE growth. Supply disruptions among key producers could lead to higher prices.”
"Crude oil prices are projected to average $43/bbl in 2016, a decline of 15 percent from last year. The market is expected to move into a small deficit in the second half of the year owing to continued declines in non-OPEC supply and limited gains in OPEC production, thereby allowing for a modest reduction in stocks" according to the report released today. "These trends are expected to continue in 2017, with a significant stock decline in the second half of the year, supporting moderately higher prices."
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