World Bank forecasts higher commodity prices in 2018

WASHINGTON — Global commodity prices are expected to continue to rise in 2018 in view of the steadily growing demand and agreed production cuts among oil exporters, said the World Bank in a quarterly report on Thursday.

In its Commodity Markets Outlook report, the World Bank expected crude oil prices to rise to $56 a barrel in 2018, up from this year's $53.

Strong oil demand and restraint in Organization of the Petroleum Exporting countries (OPEC) and non-OPEC production shored up the oil prices despite projected increases in US shale production, said the bank.

Prices for energy commodities which include oil, natural gas, and coal are forecast to grow 4 percent in 2018 after a 28 percent jump this year. Metal prices are expected to stabilize in 2018 after a 22 percent leap this year.

"Energy prices are recovering in response to steady demand and falling stocks, but much depends on whether oil producers seek to extend production cuts," said John Baffes, lead author of the report.

"Developments in China will play an important role in the price trajectory for metals," said Baffes.

Agriculture prices are expected to edge up 1.2 percent in 2018 due to reduced supplies, with grain and oils and meals prices rising marginally.

Most food markets are well-supplied and the stocks-to-use ratios of some grains are forecast to reach multi-year highs, which would restrain the increases of agriculture prices, said the bank.