Baku, Azerbaijan, Jan.25
By Leman Zeynalova – Trend:
Oil prices are projected to average $55 per barrel in 2017, unchanged from the October forecast, and an increase of 29 percent from the 2016 average oil price, the World Bank said in its January Commodity Markets Outlook.
The increase largely reflects partial compliance (in line with historical precedent) to the recent agreement between OPEC and non-OPEC producers, according to the report.
During a meeting in Vienna, Austria, on Nov. 30, 2016, OPEC members decided to implement a new production target of 32.5 million barrels per day. Later, non-OPEC countries agreed to cut the output by 558,000 barrels per day during the meeting held Dec. 10, 2016.
The World Bank expects the oil market to tighten in 2017, particularly in the second half of the year.
Oil prices are projected to increase to $60/bbl in 2018 assuming a balanced market and no additional OPEC supply restraint, according to the World Bank.
For 2017, world oil demand is projected to increase by 1.3 mb/d (1.3 percent) to an average of 97.8 mb/d, said the report.
The responsiveness of US oil production to higher prices will continue to be a key determinant of the oil market’s rebalancing, according to the World Bank.
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