WASHINGTON (dpa-AFX) - The World Bank on Thursday raised its 2017 forecast for crude oil prices to $55 per barrel from $53 per barrel, citing the decision by members of the Organization of the Petroleum Exporting Countries (OPEC) to limit production after a long period of unrestrained output.
Energy prices, which include oil, natural gas and coal, are projected to jump almost 25 percent overall next year, a larger increase than anticipated in July, the Washington-based lender said in its latest quarterly Commodity Markets Outlook. Oil prices are expected to average $43 per barrel this year, unchanged from the July report.
'We expect a solid rise in energy prices, led by oil, next year,' said John Baffes, World Bank senior economist and lead author of the report.
'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.'
The World Bank has projected modest recovery for most commodities in 2017 as demand strengthens and supplies tighten.
The price growth forecast for metals and minerals for next year was raised to 4.1 percent next year, due to increasing supply tightness. Zinc prices are forecast to rise more than 20 percent, due to mine closures and earlier production cuts. Meanwhile, 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, the report said.
Agriculture prices are expected to increase 1.4 percent in 2017, which is less than what was seen in July. The bank now expects food prices to climb more gradually than anticipated and beverage prices to drop by a greater extent on expectation of a large coffee output.
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