World Bank Tokyo Online Morning Seminar #181 “Commodity Markets Outlook, October 2023”

Although the global economy is in a much better position than it was in the 1970s to cope with a major oil-price shock, an escalation of the latest conflict in the Middle East—which comes on top of disruptions caused by the Russian invasion of Ukraine—could push global commodity markets into uncharted waters, according to the World Bank’s latest Commodity Markets Outlook.

The report provides a preliminary assessment of the potential near-term implications of the conflict for commodity markets. It finds that the effects should be limited if the conflict doesn’t widen. Under the Bank’s baseline forecast, oil prices are expected to average $90 a barrel in the current quarter before declining to an average of $81 a barrel next year as global economic growth slows. Overall commodity prices are projected to fall 4.1% next year. Prices of agricultural commodities are expected to decline next year as supplies rise. Prices of base metals are also projected to drop 5% in 2024. Commodity prices are expected to stabilize in 2025.

At this seminar, Valerie Mercer-Blackman, Lead Economist, and Paolo Agnolucci, Senior Energy Economist, Prospects Group, World Bank, introduced the main points of the report.