World Bank forecast sees minerals jump 16% in 2017

The World Bank is forecasting higher prices for industrial commodities, principally energy and metals, in 2017 and next year. The World Bank in its April Commodity Markets Outlook is holding steady its crude oil price forecast for this year at US$55 per barrel, increasing to an average of US$60 per barrel in 2018. Rising oil prices, supported by production cutbacks by the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC states, will allow markets to gradually rebalance. These oil price forecasts are subject to downside risks should the rebound in the U.S. shale oil industry be greater than expected. Prices for energy commodities, which also include natural gas and coal, are projected to jump 26% this year and 8% in 2018. In line with oil price forecasts, natural gas is anticipated to gain 15% this year, led by a jump in U.S. prices. Coal is seen climbing 6% in 2017, due to earlier supply restrictions in China, which consumes half the world’s coal output. Prices for non-energy commodities, which include agriculture, fertilizers, and metals and minerals, are forecast to increase in 2017, the first rise in five years. Metals prices are projected to jump 16% this year due to strong demand, especially from China, and supply constraints, including mine disruptions in Chile, Indonesia and Peru.