World Bank projects future crude oil price averages

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The World Bank revised upward its 2015 crude oil price forecast to $57/barrel from $53/b in April, with demand higher than expected in the second quarter, particularly in the US.

However, large inventories and rising output from OPEC “suggest prices will likely remain weak in the medium-term,” John Baffes, the World Bank’s senior economist, said in a statement.

Related: Kings of Crude: US vs OPEC

The bank said it expects the price to rise to $61/b in 2016 as supply growth slows.

The price projections are included in the organization’s latest quarterly Commodity Markets Outlook.

It noted that the US rig count is down 60% since its November high, but oil production continues to grow more than 1 million b/d year on year.

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“OPEC output also continues to surge, with June production 1.5 million b/d higher than a year earlier, with most of the gains in Iraq and Saudi Arabia,” the outlook said.

Global oil consumption rose 1.9 million b/d, or 2%, year on year in the first quarter, the bank said, estimating that second-quarter demand increased 1.4 million b/d, or 1.5%.

Related: OPEC Sees More Balanced Oil Market in 2016

But the bank said it expects world oil demand growth to slow in the second half of the year, with the total annual global growth projected at 1.4 million b/d. The growth will slow further in 2016 to 1.2 million b/d, the report said.

Meanwhile, global oil supply outpaced demand in the first two quarters of the year, recording year-on-year growth of 3.1 million b/d in the first quarter and 3.3 million b/d in the second quarter, the bank said.


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