The World Bank has slashed its outlook for oil and metals prices on Thursday due to the economic fallout of the coronavirus pandemic, warning that the commodity market shock could hit developing countries hardest.
This was even as oil prices hit $22.17 per barrel (3.26pm) yesterday, indicating a $1.57 gain over Wednesday’s $20.60
According to the World Bank, crude oil prices are expected to average $35 a barrel this year, down 43 per cent from the average in 2019, marking a sharp downward revision from its October forecast.
“The downward revision reflects an historically large drop in demand,” the World Bank said in a press release. It said overproduction from OPEC and other major world oil producers was exacerbating the price decline.
Meanwhile, metals prices, are seen dropping 13 per cent overall this year, the World Bank said. But gold, a traditional safe-haven investment, is seen up nearly 15 per cent.
It added that the impact of the health crisis on agricultural commodity prices is expected to be moderate, but that supply chain disruptions could raise the food security risk in some places.