World Bank lifts oil-price forecast
The World Bank raised its forecast for crude-oil prices by about 11% on Tuesday, citing expectations for a reduction in the global glut of crude supplies.
The international institution, which provides loans to developing countries, expects crude-oil prices to average $41 a barrel this year, compared with a previous forecast for $37 as oversupply in markets is expected to recede, according to the quarterly Commodity Markets Outlook report released Tuesday. The World Bank forecast is an average of Brent LCOM6, +4.36% West Texas Intermediate CLM6, +1.09% and Dubai crudes.
The estimate for this year would still mark a decline of 19% from last year, and implies “small increases through the rest of the year as the oversupply in the oil market diminishes, the report said.
“the recent oil price rally brought some relief to producers’ cash flow, and many hedged production forward at higher prices, thereby delaying supply rebalancing,” the report said. “Higher prices and continued efficiency improvements” could also keep supply and demand from reaching a balance.
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