World Bank report expects continued weakness in commodity prices this year

Crude oil prices fine-tuned to $57 from $53 a barrel

economic Daily News reporter Lian Jun reported: The World Bank stated in the latest quarterly report of the Commodity Market Outlook that although international oil prices rebounded in the second quarter of this year, global commodity prices will continue to be weak this year, and prices may be in 2016. A slight recovery.

In terms of energy, the World Bank has fine-tuned its crude oil price forecast for 2015 after oil prices rose 17% in the second quarter: from US $53 per barrel forecast in April to US $57. The World Bank report pointed out that overall global energy prices rose by 12% in the second quarter, and the impact of higher oil prices was offset by lower prices of natural gas (down 13%) and coal (down 4%). However, the World Bank expects energy prices to be on average 39% lower this year than in 2014. Natural gas prices in the three major markets of the United States, Europe and Asia are expected to fall by 17%. John Bafis, senior economist at the World Bank and author of the Commodity Market Outlook, said: "Crude oil demand in the second quarter was higher than expected. Despite a slight upward revision in the 2015 price forecast, large inventories and increased production from OPEC members point to the possibility of continued weakness in oil prices in the medium term."

the report predicts that the downside risks to energy commodity prices include higher-than-expected non-OPEC member country production and continued increase in OPEC member country production; possible upward pressure from high-cost well closures (for example, the total number of drilling platforms in the United States has decreased by 60% since the peak in November last year) and geopolitical tensions. The report emphasized that after the Iran nuclear agreement is reached, "sanctions will be relaxed, including restrictions on Iran's oil exports".

The World Bank reported that non-energy commodity prices fell 2 per cent in the second quarter and predicted that prices would average 12 per cent lower this year than in 2014 and 1.5 per cent higher in 2016 than this year.

On the metals side, metal prices fell slightly in the second quarter, with iron ore prices down 2/3 from their 2011 highs. The World Bank forecasts metal prices this year to be 16% lower than 2014 on average, down from the 12% forecast in April.

Agricultural prices fell 2.6 per cent in the second quarter as food commodities, particularly edible oils and cereals, fell sharply, reflecting further improvements in supply conditions and unaffected by adverse weather and El Niño concerns in North America. The World Bank predicts that agricultural prices this year will be an average of 11% lower than in 2014, down from the 9% forecast in April.

In this report, the World Bank makes a thematic assessment of the role of China and India in global commodity consumption. Demand from China and India (to a lesser extent) has significantly increased global demand for metals and energy, especially coal, over the past two decades, but has had a small impact on food commodities, the report said. Among them, China's metal and coal consumption has increased to about 50% of global consumption, while India's metal and coal consumption accounts for 3% and 9% respectively. These two consumption patterns reflect the different growth patterns of China and India. And commodity consumption structure.

2015-07-24 15:39 | Author: Lian Jun | Source: China Economic Net-Economic Daily