World Bank Raises 2016 Oil Price Forecast on Supply Outages, Robust Demand


NEW YORK, July 26 (Reuters) - The World Bank raised its crude oil forecast for 2016 to $43 a barrel on Tuesday, from $41 a barrel, citing supply outages and robust demand in the second quarter.

Disruptions in oil supply during the second quarter, including from militant attacks in Nigeria and wildfires in Canada, helped oil prices rebound from 12-year lows hit early in the year.

However, since peaking at about $51 a barrel early in June, a growing overhang in refined products has damped the demand outlook and resurgent supply from many of the outages has slowed the rebalancing of the crude oil market.

The World Bank said its latest forecast takes these recent developments into account.

"We expect slightly higher oil prices for the second half of 2016 as oil market oversupply diminishes," John Baffes, senior economist and lead author of the World Bank's quarterly commodities markets outlook, said in a statement.

"However, inventories remain very large and will take some time to be drawn down."

U.S. crude on Tuesday fell 26 cents to $42.87 per barrel, a 0.6 percent loss after hitting a three-month low of $42.36.

U.S. crude stockpiles have fallen for nine straight weeks. But at about 519 million barrels, inventories are at historically high levels for this time of year, data from the U.S. Energy Information Administration showed last week.

(Reporting by Devika Krishna Kumar in New York; Editing by Alan Crosby)

Copyright 2017 Thomson Reuters. Click for Restrictions.


Click on the button below to add a comment.
Post a Comment
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.


Our Privacy Pledge

Most Popular Articles

From the Career Center
Jobs that may interest you
Production Analyst
Expertise: Accounting|Financial Analyst
Location: Midland, TX
Executive Protection Coordinator
Expertise: Risk Management|Security
Location: TX
United States Denver: Proposals Specialist
Expertise: Business Development|Marketing|Sales
Location: Denver, CO
search for more jobs

Brent Crude Oil : $50.56/BBL 0.15%
Light Crude Oil : $47.7/BBL 0.70%
Natural Gas : $3.05/MMBtu 1.32%
Updated in last 24 hours