Oil price bubbling up

Freight rates and operator
margins are likely to come
under further pressure if the
World Bank is right about oil
prices rising.
The bank has raised its 2017
forecast for crude oil prices
to $55 per barrel from $53
per barrel as members of the
Organisation of Petroleum
Exporting Countries (Opec)
prepare to limit production.
Energy prices, which include
oil, natural gas and coal, are
projected to jump almost
25% overall next year, a larger
increase than anticipated in
July.
The revised forecast appears
in the World Bank’s latest
Commodity Markets Outlook.
Oil prices are expected
to average $43 per barrel in
2016, unchanged from the July
report.
“We expect a solid rise in
energy prices, led by oil, next
year,” said John Baffes, senior
economist and lead author
of the Commodity Markets
Outlook.
“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,” he added.
Good news for commodity
exporters is that prices are
expected to rise in 2017 as
demand strengthens and
supplies tighten.
Metals and minerals prices
are expected to rise 4.1%
next year due to increasing
supply tightness. Zinc prices
are forecast to rise more than
20% following the closure of
some large zinc mines and
production cuts in earlier years.
Gold is projected to decline
slightly next year to US$1 219
an ounce as interest rates are
likely to rise.