Tishwash: The World Bank cuts oil and mineral price expectations as demand collapses
The World Bank trimmed its forecast for oil and minerals prices on Thursday due to the economic repercussions of the Corona Virus pandemic and said that the shock of commodity markets could be more severe for developing countries.
The World Bank said crude oil prices are expected to average $ 35 a barrel this year, 43 percent below the 2019 average, and in a sharp drop from its October forecast.
“The reduction is due to a huge unprecedented decline in demand,” the bank said in a press release, and said that the decline in prices was exacerbated by the exaggeration in production from OPEC and other major oil producers.
Meanwhile, mineral prices are expected to drop 13 percent in total this year, the bank said. But gold, a traditional safe haven, is expected to rise 15 percent.
He added that the impact of the health crisis on agricultural commodities is expected to be moderate, but supply chain disturbances may increase food security risks in some areas.
“The massive shock of commodity markets and low oil prices could cause a serious setback for developing economies,” Mukhtar Dayoub, World Bank Vice President for Infrastructure Affairs, said in the statement.
The foundation recommended that governments reform energy subsidy programs to make funds available to tackle the Corona virus, and favored not using fees or other commercial protection tools to fortify domestic industries link