World Bank reduces its forecast for oil price to $67 per barrel for 2019-20

09 January, 2019, 10:53 275
World Bank reduces its forecast for oil price to $67 per barrel for 2019-20

In December, the World Bank forecasted the average oil price of 71 dollars per barrel for the next three years.

The World Bank has reduced the forecast for an average price for oil for the next 2 years to 67 dollars per barrel, 4 dollars lower than in the December forecast, according to the Bank's January report on "Perspectives of the Global Economy," RIA Novosti informs.  

In December, the World Bank forecasted the average oil price of 71 dollars per barrel for the next three years, in a June report - 69 dollars per barrel. 

"67 dollars per barrel is forecasted for oil in 2019 and 2020, 2 dollars lower than the June forecast," says the report, including the high uncertainty surrounding the forecast. 

"While a growing demand for oil is expected, a decline [due to GDP growth falling] on the emerging markets can lead to a more serious effect," the Bank's analysists say, adding that it depends on arrangements between the OPEC member countries and their partners. 

The World Bank specifies that despite the reached arrangements, the deal's details remain unclear for the market. 

The OPEC member countries' December meeting agreed to reduce oil production by 1.2 million barrels per day overall for the six months starting with January 2019, including 800 thousand barrels of oil or 2.5% of the total oil production for the OPEC member countries, and 400 thousand (2%) for the non-OPEC member countries. Reduction from October 2018 is true for most of the countries, except for Kuwait and Azerbaijan (from September), including Kazakhstan - a reduction from November. The countries such as Iran, Venezuela, and Libya were withdrawn from the OPEC deal.