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Energy

Commodity Markets Outlook: Modest Oil Price Rise, Trade Uncertainty

John Baffes's picture
Commodity prices have moved in different directions in recent months – energy prices rose while agriculture and metal prices fell – and are expected to rise or stabilize in 2019, according to the October Commodity Markets Outlook. The following five charts explain:  

Figure 1: Energy and agriculture prices are seen rising in 2019, but forecasts are revised down for all commodities except energy and fertilizers.

Energy prices gain 7 percent in May–Pink Sheet

John Baffes's picture
Energy commodity prices gained more than 7 percent in May, with advances in U.S. natural gas (+27 percent), coal (+12 percent) and oil (+7 percent), the World Bank’s Pink Sheet reported.

Non-energy prices changed little as a 1.4 percent gain in beverages was balanced by a 2 percent loss in raw materials and a 1.1 percent decline in Fertilizers.

Metals prices gained 0.4 percent, led by nickel (+3 percent) and aluminum (+2 percent).

Precious metals prices lost 2.1 percent, led by a similar decline in gold.

The Pink Sheet is a monthly report that monitors commodity price movements.
 
Commodity prices advanced in May

Source: World Bank.

Why commodity prices are rising, in nine charts

John Baffes's picture
Commodity prices strengthened in early 2018, supported by supply and demand factors, including accelerated global growth, which has lifted demand for most industrial commodities, and supply constraints affecting others.

Chart 1: Commodity prices are forecast to rise across the board

The energy price index is anticipated to rise 20 percent in 2018, largely on strengthening of oil prices. The increase is a 16-percentage point upward revision from October 2017. Metal prices are projected to increase 9 percent in 2018 due to a further pickup in demand. Agricultural prices are forecast to gain more than 2 percent.
 
2018 commodity price rise forecasts (percent change from 2017 to 2018)
Source: World Bank

Energy prices advanced, fertilizer prices declined in April -- Pink Sheet

John Baffes's picture
Energy commodity prices gained 8.2 percent in April, led by a 40 percent increase in U.S. natural gas prices, the World Bank’s Pink Sheet reported.

Non-energy prices advanced 1.8 percent while agricultural prices increased 1.7 percent on higher prices for wheat (up 11 percent), rice and cocoa (4 percent rises each), soybean meal and tea (4 percent gains each). Fertilizer prices decreased 0.7 percent, led by a 5 percent drop in urea.

Metals prices gained 2.3 percent, led by gains in aluminum (up 9 percent) and nickel (4 percent rise).

March energy prices advanced, metals prices declined–Pink Sheet

John Baffes's picture
Energy commodity prices gained 1 percent in March—led by a 1 percent increase in crude oil prices, the World Bank’s Pink Sheet reported.

Non-energy prices fell almost 1 percent due to a drop in metal prices. Agricultural prices increased 1 percent, largely on higher cocoa prices (+18 percent), maize and soybean meal (+5 percent each), as well as cotton and soybeans (+4 percent each). Fertilizer prices rose more than 1 percent, led by TSP (triple superphosphate) (+3 percent) and DAP (diammonium phosphate) (+2 percent).

Metals prices dropped 5 percent, led by iron ore prices (-9 percent), zinc and lead (-7 percent each), and aluminum (-5 percent).

Precious metals prices were marginally down due to a 1 percent decline in silver prices.

The Pink Sheet is a monthly report that monitors commodity price movements.
 
Energy prices advanced, metal prices declined in March

Source: World Bank.
 

Most commodity prices surged in January, led by energy–Pink Sheet

John Baffes's picture
Energy commodity prices surged 9 percent in January, the seventh monthly gain in a row, led by an almost 30 percent increase in U.S. natural gas prices, the World Bank’s Pink Sheet reported.

Non-energy prices made solid advances as well, with metals and minerals prices gaining more than 5 percent, also the seventh consecutive monthly increase, and a five-year high. Nickel and zinc, up 12 and 8 percent respectively, led the rise.

Precious metals climbed nearly 6 percent, with similar gains in gold and silver.

Agricultural prices, which had been stable for nearly 2 years, increased more than 2 percent, led by advances in rice (+9 percent) and cotton (+5 percent). Fertilizer prices rose over 1 percent, led by DAP (+3 percent) and Urea (+2 percent).

The Pink Sheet is a monthly report that monitors commodity price movements.
 
All commodity price indexes gained in January, led by energy
Source: World Bank.

What triggered the oil price plunge of 2014-2016 and why it failed to deliver an economic impetus in eight charts

Marc Stocker's picture
Also available in: Español

Download the January 2018 Global Economic Prospects report.

The 2014-16 collapse in oil prices was driven by a growing supply glut, but failed to deliver the boost to global growth that many had expected. In the event, the benefits of substantially lower oil prices were muted by the low responsiveness of economic activity in key oil-importing emerging markets, the effects on U.S. activity of a sharp contraction in energy investment and an abrupt slowdown in key oil exporters. 

Biggest drop in oil prices in modern history

Between mid-2014 and early 2016, the global economy faced one of the largest oil price declines in modern history. The 70 percent price drop during that period was one of the three biggest declines since World War II, and the longest lasting since the supply-driven collapse of 1986.

Real oil prices
Source: World Bank.
Notes: Real oil prices are calculated as the nominal price deflated by the international manufacturers unit value index, in which 100=2010. World Bank crude oil average. Last observation is November 2017.

Why 2018 global growth will be strong, and why there is still cause for concern, in 10 charts

Carlos Arteta's picture
Also available in: Español |  Français | 中文 |  العربية 

Download the January 2018 Global Economic Prospects report.

Global growth accelerated to 3 percent in 2017, supported by a broad-based cyclical recovery encompassing more than half of the world’s economies, and is expected to edge up to 3.1 percent in 2018. Global trade regained significant momentum, supported by an upturn in investment.

As headwinds ease for commodity exporters, growth across emerging and developing economies is expected to pick up. However, risks to the outlook remain titled to the downside, such as the possibility of disorderly financial market adjustment or rising geopolitical tensions.

A major concern in the subdued pace of potential growth across emerging market and developing economies, which is expected to further decline in the next decade. Structural reforms will be essential to stem this decline, and counter the negative effects of any future crisis that could materialize.

The broad-based recovery should continue

Global growth accelerated markedly in 2017, supported by a broad-based recovery across advanced economies and emerging market and developing economies (EMDEs), and it is expected to edge up in 2018.
 
Growth

Energy and raw materials prices gained in December, beverages and fertilizer prices fell – Pink Sheet

John Baffes's picture
Energy commodity prices gained 2 percent in December—the sixth consecutive monthly gain—led by a 6 percent increase in coal prices, the World Bank’s Pink Sheet reported.

Agriculture prices declined marginally, as a 5 percent decline in beverages, led by cocoa (down 10 percent) outweighed a 2 percent increase in raw materials prices, led by cotton (up 6 percent) and natural rubber (up 5 percent). Fertilizer prices declined 5 percent, led by a 11 percent drop in urea.

Metals and mineral prices gained less than 1 percent. A large gain in iron ore (up 12 percent) was offset by declines in zinc and nickel. Precious metals prices declined 2 percent, led by a 1 percent decline in gold.

The pink sheet is a monthly report that monitors commodity price movements.
 
Energy and raw material price indexes increased in December while beverage and fertilizer prices declined sharply.

 

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