The World Bank predicts a rise in industrial raw material prices, primarily energy and metals, in this year and the next, as stated in the April forecasts of the World Bank for commodity markets.
In the latest monthly forecasts for commodity markets, published on Wednesday, the estimates for crude oil prices have been maintained, according to which they should average $55 per barrel this year, and rise to an average of $60 in 2018.
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“The rise in oil prices, supported by production cuts implemented by the Organization of the Petroleum Exporting Countries (OPEC) and producer countries outside that cartel, will allow for a gradual re-establishment of balance in the markets,” states the World Bank’s April forecasts for the market. Such price estimates could be revised downward if the surge in shale oil production in the U.S. is greater than expected, it is noted in the World Bank’s April forecasts.
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Energy raw material prices, which include natural gas and coal, are expected to jump 26 percent this year, and rise by eight percent in 2018. In line with oil price projections, natural gas is expected to increase by 15 percent this year, driven by a surge in prices in the U.S. market. Coal is expected to rise by six percent in 2017, due to earlier supply restrictions in China, which consumes half of the world’s total coal production, the report states.
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For 2017, they also predict the first price increase in the last five years in the category of non-energy raw materials, which includes agricultural products, fertilizers, and metals and minerals.
As estimated by the World Bank, metal prices are expected to jump 16 percent this year due to strong demand, primarily from China, and supply constraints, including disruptions in mines in China, Indonesia, and Peru.
