The World Bank is raising its 2017 forecast for crude oil prices to $55 per barrel from $53 per barrel as members of the Organization of the Petroleum Exporting Countries (OPEC) prepare to limit production after a long period of unrestrained output, according to World Bank (WB).
Energy prices, which include oil, natural gas and coal, are projected to jump almost 25 percent overall next year, a larger increase than anticipated in July. The revised forecast appears in the WB's latest Commodity Markets Outlook.
Oil prices are expected to average $43 per barrel in 2016, unchanged from the July report.
"We expect a solid rise in energy prices, led by oil, next year," said John Baffes, Senior Economist and lead author of the Commodity Markets Outlook.
"However, there is considerable uncertainty around the outlook as we await the details and the implementation of the OPEC agreement, which, if carried through, will undoubtedly impact oil markets," John Baffes added.
A modest recovery is projected for most commodities in 2017 as demand strengthens and supplies tighten. Metals and minerals prices are expected to rise 4.1 percent next year, a 0.5 percentage point upward revision due to increasing supply tightness.
Zinc prices are forecast to rise more than 20 percent following the closure of some large zinc mines and production cuts in earlier years.
Gold is projected to decline slightly next year to $1,219 per ounce as interest rates are likely to rise and safe haven buying ebbs.