By Staff writer
Oil prices fell by 47% in 2015 and are expected to decline by another 27% this year, says report
The World Bank has lowered its 2016 forecast for crude oil prices to $37 per barrel in its latest Commodity Markets Outlook report from $51 per barrel in its October projections.
The lower forecast reflects a number of supply and demand factors. These include sooner-than-anticipated resumption of exports by Iran, greater resilience in US production due to cost cuts and efficiency gains, a mild winter in the Northern Hemisphere, and weak growth prospects in major emerging market economies, the report said.
Oil prices fell by 47 percent in 2015 and are expected to decline, on an annual average, by another 27 percent in 2016.
However, from their current lows, a gradual recovery in oil prices is expected over the course of the year, added the World Bank.
It said the anticipated oil price recovery is forecast to be smaller than the rebounds that followed sharp drops in 2008, 1998, and 1986 while the price outlook remains subject to considerable downside risks.
"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 Commodities Markets Outlook.
"While we see some prospect for commodity prices to rise slightly over the next two years, significant downside risks remain."