World Bank raises oil price forecast for 2017

The World Bank is raising its 2017 forecast for crude oil prices to $55 per barrel from $53 per barrel.

It explained that this was the case as members of the Organization of the Petroleum Exporting Countries (OPEC) prepared to limit production after a long period of unrestrained output.

It said in its Online Media Briefing Centre (OMBC) available to the Ghana News Agency that energy prices, which included oil, natural gas and coal, were projected to jump almost 25 percent overall next year, a larger increase than anticipated in July.

The revised forecast appeared in the World Bank's latest Commodity Markets Outlook.

It indicated oil prices were expected to average $43 per barrel in 2016, unchanged from the July report.

Mr John Baffes, Senior Economist and Lead Author of the Commodity Markets Outlook, said "We expect a solid rise in energy prices, led by oil, next year.

"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,” he said.

It noted a modest recovery was projected for most commodities in 2017 as demand strengthened and supplies tightened.

The statement said metals and minerals prices were expected to rise 4.1 percent next year, a 0.5 percentage point upward revision due to increasing supply tightness.

It said zinc prices were forecasted to rise more than 20 percent following the closure of some large zinc mines and production cuts in earlier years.

Gold is projected to decline slightly next year to $1,219 per ounce as interest rates are likely to rise and safe haven buying ebbs.