The oil price up will go up to $41 a barrel this year when agriculture produces will be cheaper, the latest market update of the World Bank (WB) said.
The WB its latest Commodity Markets Outlook attributed the rebounding oil prices to the improving market sentiment, a weakening dollar and receding supply. The projection is 13.51 percent higher from its previous forecast of $37 a barrel, reports BSS.
The WB revised forecast came only two days after Bangladesh government cut the prices of major petroleum products, ranging from 4.41 percent to 10.41 percent.
The crude oil market rebounded from a low of $25 per barrel in mid-January to $40 per barrel in April following production disruptions in Iraq and Nigeria and a decline in non-organization of the Petroleum Exporting Countries production, mainly US shale.
“We expect slightly higher prices for energy commodities over the course of the year as markets rebalance after a period of oversupply,” said John Baffes, Senior Economist and lead author of the Commodities Markets Outlook.
Apart from oil, the WB revised down forecast for all main commodity due to persistently increasing supplies. “Non-energy commodities, such as metals and minerals, agriculture, and fertilizers, are due to decline 5.1 percent this year, a downward revision from the 3.7 percent drop forecast in January” the update said.
The prediction for low commodity prices would cheer the limited income people, but the WB cautioned that the commodity price fall would also weaken the growth prospects for many resource-rich countries that experienced a surge in exploration, investment, and production during the commodities boom of the 2000s.
