The World Bank has remained upbeat on the outlook for oil prices, despite fears that the market recovery will take longer than expected.
The international organisation hiked its forecast for crude this year to $43 per barrel, up from $41 in April. It cited a string of unanticipated supply outages and robust demand in the second quarter. Nevertheless, this would still represent a 15 per cent decline from last year.
This year's oil market rally has stalled recently amid concerns about a stubborn supply glut, as well as global growth post-Brexit vote.
"The market is expected to move into a small deficit in the second half of the year owing to continued declines in non-Opec supply and limited gains in Opec production, thereby allowing for a modest reduction in stocks," according to its world commodities outlook released today.
"These trends are expected to continue in 2017, with a significant stock decline in the second half of the year, supporting moderately higher prices."
The development bank raised its forecast by four US dollars to $41 in April, due to signs that the persistent oversupply would soon start to recede.
Metals prices are projected to shrink 11 per cent in 2016, a slightly larger drop than anticipated in April.
The World Bank expects nickel to fall 22 per cent, copper to drop 15 per cent and iron ore to tumbles 10 per cent. However, it thinks that the zinc market will tighten, due to the closure of large mines.
But stronger safe haven buying and deepening concerns about global growth will help precious metals swell eight per cent.
Silver and gold prices are expected to rise eight per cent, but platinum prices are projected to decline five per cent.