The World Bank offered some respite to non-Opec oil exporters on Wednesday by upping its oil price forecast for 2016.
The bank increased its projection to US$43 from US$41 due to supply disruption and buoyant demand in the second quarter.
Oil prices jumped 37% in the second quarter of 2016 due to factors including wildfires in Canada and sabotage of oil infrastructure in Nigeria.
The bank said the forecast nevertheless took account of lower demand in the last few weeks and recovering supplies.
The bank’s senior economist, John Baffes, said: “We expect slightly higher oil prices for the second half of 2016 as oil market oversupply diminishes.”
Despite the recovery of oil and many other commodity prices in the second quarter, most commodity indexes tracked by the World Bank are expected to decline this year, according to its Commodity Markets Outlook.
It attributes the trend to persistently elevated supplies, and in the case of industrial commodities – including energy, metals, and agricultural raw materials -- weak growth prospects in emerging market and developing economies.
But the bank said it expected most of the declines to be smaller than expected in the April outlook.
Energy prices, which include oil, natural gas and coal, are due to fall 16.4% in 2016, a more gradual decline than the 19.3% drop anticipated in April.
The price of a barrel of Brent crude fell 0.20% to US$44.78 on Wednesday while a barrel of US light crude gained 0.35% to US$43.07.
Sun Global Investments blamed the fall in the price of Brent to oversupply concerns and waning demand from key international markets.
Sun's chief executive Mihir Kapadia said: “In spite of these worries, the World Bank has raised its previous prediction for the year of US$41 p/b for crude up to US$43, in light of forecasts of slower oil production among OPEC members and falling supplies in other nations.
“While that’s a welcome prognosis, it provides only sparse relief to critical exporters and emerging economies such as Russia, Nigeria, Iran and Mexico.
“It seems likely that the global oil engine will stop stalling over the coming months, but it will take more time still for the market to pick up speed.”
Meanwhile, Bank of America Merrill Lynch (BofAML) said a collapse in global industry spending had sparked an acceleration in non-OPEC oil field decline rates to 5%, higher than 2009’s levels.
Some OPEC players like Venezuela, Angola, or Algeria have also been affected, so Saudi, Iran, Iraq would have to fill the gap, the bank said.
But BofAML analysts said: “Saudi has not yet hiked drilling activity to make up losses elsewhere, so we retain our US$61/bbl Brent view for 2017.”