Dhaka, Bangladesh (BBN) – Crude oil prices are expected to average $66 a barrel in 2019 and $65 a barrel in 2020, a downward revision from the October forecast due to the weaker-than-expected global growth outlook and greater-than-anticipated US production, the World Bank has said.
Metal prices are expected to continue a recovery in 2019 that follows a sharp drop in the second half of 2018, the World Bank said in its April Commodity Markets Outlook.
The recovery has been spurred by stabilization of activity in China after weakness around the turn of the year, as well as various supply shortfalls.
After a drop in late 2018, oil prices have risen steadily since the start of the year, as OPEC and partners have cut production, and output has declined in Venezuela and Iran.
The US shale production is expected to remain robust after surging in 2018. Energy prices overall – which also include natural gas and coal ‒ are expected to average 5.4 per cent lower in 2019 than in 2018.
On the other hand, agriculture prices are projected to fall 2.6 percent this year but rebound in 2020 due to lower crop production and higher costs for energy and fertilizers. An escalation of trade tensions would likely push prices lower, but higher-than-expected energy costs could lift prices more than expected.
A special focus section shows that when countries intervene to dampen the effect of food price fluctuations on their citizens, the collective intervention of many countries can produce the opposite of the intended effect and amplify movements in world prices – to the detriment of the most vulnerable populations.