World Bank Slashes 2016 Oil Price Forecast
The World Bank has cut its 2016 forecast for oil prices from US$ 51 a barrel to US$ 37 mainly due to lower heating demand brought on by the late and warmer winter as well as slower growth in China. The reluctance by major oil producers like Saudi Arabia, Russia, USA, Iran and Iraq to cut production is adding to the oversupply. Iraq bases 90% – 95% of its country’s budget on oil revenue which has significantly dropped due to the low price.
The Brent crude price is currently around the US$ 30 level so a US$ 37 prediction is still on the upside. This time last year, oil price was about US$ 50 a barrel and don’t we all remember a time (2014) when it breached US$ 115 a barrel and what it did to our petrol prices at the pump?
The continued low price will be good news to petrolheads and motorists in general, as well as oil importers and the travel and shipping industries; provided the demand is sustained. As an aside, stock markets of late have come under pressure due to financial performances which didn’t meet forecasts. Companies like BASF and Apple are some of the companies which have reported a drop in numbers.
But life has to go on and wheels have to keep turning. We still have to spend, but we can spend a little wiser. If you need a new car, search for one that gives you the best value in relation to your needs. If you think you can do without a brand new car, then look here.
