World Bank, Energy News, ET EnergyWorld

Washington: The recent surge in global oil prices could threaten economic growth and is not expected to decline until 2023, the World Bank said Thursday.

Average crude prices are expected to end the year at $ 70 a barrel, up 70% from 2020, according to the latest commodity market outlook.

This pushes up other energy prices like natural gas, according to the report.

“Soaring energy prices pose significant near-term risks to global inflation and, if sustained, could also weigh on growth in energy-importing countries,” said Ayhan Kose, chief economist from the World Bank.

The increases were “more pronounced than expected” and “could complicate policy choices as countries recover from last year’s global recession.”

Oil prices in recent weeks have surpassed $ 80 a barrel, the highest point in years, as economies reopen following pandemic shutdowns and amid shipping bottlenecks.

The World Bank uses an average of Brent, West Texas Intermediate and Dubai which it says “will remain at high levels in 2022 but will start to decline in the second half of the year as supply constraints ease.”

The 2022 average is expected to hit $ 74 before dropping to $ 65 in 2023, the World Bank said.

But the report warns that “further price hikes may occur in the short term amid very low inventories and persistent supply bottlenecks.”


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Steve R. Hansen

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