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Title Oil price rises in 2019 to be modest as U.S. production constraints ease: World Bank
Source Other
Date 2018-11-08 PM 7:35:54 Hit 20
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Growing global trade tensions are weighing on non-energy commodity prices and are leading to downward revisions to 2019 price forecasts, the World Bank said.

Oil prices are forecast to average $74 a barrel over 2019, only marginally up from a projected average of $72 a barrel in 2018, while metals prices are expected to remain broadly stable in 2019, the World Bank said in its October Commodity Markets Outlook.

Prices for energy commodities – which include oil, natural gas, and coal -- are forecast to average 33.3 percent higher in 2018 than the previous year but to broadly stabilize in 2019, the World Bank said. U.S. oil production growth is expected to be robust whereas oil production losses are expected in Iran and Venezuela. Global demand is expected to hold steady.

Prices for agricultural commodities, including food commodities and raw materials, are anticipated to decline marginally in 2018 amid ample supply and trade tensions before rising 1.6 percent in 2019.

The metals index is expected to rise 5.4 percent this year and decline modestly in 2019. Prices could drop more than expected if global trade frictions intensify.

“Further escalation of trade restrictions between major economies could lead to large economic losses and cascading trade costs through global value chains,” said Shanta Devarajan, World Bank Senior Director for Development Economics and acting Chief Economist. “Any setbacks to growth in major economies would have significant negative repercussions for the rest of the world through trade, confidence, financial, and commodity-market channels.”

 

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