The World Bank has raised its 2017 forecast for crude oil prices to $55 per barrel from $53 per barrel, report by GNA said.
The bank hinged the prediction on the possibility of the Organization of the Petroleum Exporting Countries (OPEC) reaching a deal to limit production after a long period of unrestrained output.
The world bank disclosed in its Online Media Briefing Centre (OMBC) 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 also appeared in the World Bank’s latest Commodity Markets Outlook.
It shows that oil prices were expected to average $43 per barrel in 2016, unchanged from the July report.
John Baffes, a Senior Economist and Lead Author of the Commodity Markets Outlook, said “We expect a solid rise in energy prices, led by oil, next year.
He continued, ”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.”
It said that a modest recovery was projected for most commodities in 2017 as demand strengthened and supplies tightened.
Also, 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.
Meanwhile, OPEC has affirmed Russia’s commitment to supply freeze.
It said Russia, the world’s biggest energy producer, is “on board” with an OPEC agreement to limit crude oil production to help re-balance the market, according to the group’s Secretary- General Mohammed Barkindo.
Members of the Organization of Petroleum Exporting Countries remain committed to an agreement they reached in Algiers in September to trim output, and cooperation from non-OPEC producers will help bring the oil market back into balance, Barkindo told reporters at an energy conference in Abu Dhabi.
Russia is due to join OPEC for talks later this month in Vienna, where the group will convene for its bi-annual meeting.
“We as OPEC remain committed to the Algiers accord,” Barkindo said Monday. “I have heard from the highest quarters in Moscow that Russia is on board.”
OPEC, which pumps about 40 percent of the world’s oil, is trying to persuade producers from outside the group, such as Russia, to join the cuts.
The organization’s members want to put the changes into effect when they meet in Vienna on Nov. 30. The group has held talks over the past weeks with producer nations Russia, Azerbaijan, Brazil, Kazakhstan and Mexico.
Producers from outside OPEC need to join the group in cutting output, Eni SpA CEO Claudio Descalzi said in a Bloomberg TV interview from Abu Dhabi. “OPEC alone is not enough,” he said