The oil price plunge brought energy in line with other prices

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2 Outline Recent developments and price forecasts Energy markets Agricultural markets Metal markets Prospects of the global economy Where are commodity prices heading?

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4 The oil price plunge brought energy in line with other prices Index, nominal terms, 2010 = Energy 120 Agriculture 90 Metals Jan-07 Sep-07 May-08 Jan-09 Sep-09 May-10 Jan-11 Sep-11 May-12 Jan-13 Sep-13 May-14 Jan-15 Sep-15 Source: World Bank Note: Last observation is November 2015

5 Developments in commodity markets and price outlook Summary Across the board weakening in commodity prices and across the board downward adjustments to price forecasts: o Crude oil prices have been fluctuating around $45/bbl since August 2015 from $110/bbl in June o Agricultural prices have weakened as well, down more than 10% since a year ago. o Metal prices are down 25% since a year ago. o All three industrial commodity price indices (energy, metals, and agricultural raw materials) have declined by similar magnitudes (about 40 percent each) since their early 2011 peaks. Commodity prices and forecasts (2010 = 100) Prices (F=forecast) Change (%) F 2017F Energy Non-Energy Metals Agriculture Food Beverages Raw Materials Fertilizers Memorandum items Crude oil (US$/bbl) Gold (US$/toz) 1,266 1,174 1,155 1, Source: World Bank, Commodity Markets Outlook Note: Forecasts as of October 20, Prices for 2015 are as of November

6 Developments in commodity markets and price outlook Summary Across the board weakening in commodity prices and across the board downward adjustments to price forecasts: o Crude oil prices have been fluctuating around $45/bbl since August 2015 from $110/bbl in June o Agricultural prices have weakened as well, down more than 10% since a year ago. o Metal prices are down 25% since a year ago. o All three industrial commodity price indices (energy, metals, and agricultural raw materials) have declined by similar magnitudes (about 40 percent each) since their early 2011 peaks. Causes of the price weakness include: o Well-supplied markets for industrial commodities (in turn a reflection of past investments due to high prices). Increased oil production by OPEC, notably Iraq and Saudi Arabia. o Good crop harvests during the past 3 years in the case of agriculture. o Strong US dollar and likely tightening of financial conditions. o Weak economic growth, especially in emerging economies where most commodity demand growth takes place. Commodity prices and forecasts (2010 = 100) Prices (F=forecast) Change (%) F 2017F Energy Non-Energy Metals Agriculture Food Beverages Raw Materials Fertilizers Memorandum items Crude oil (US$/bbl) Gold (US$/toz) 1,266 1,174 1,155 1, Source: World Bank, Commodity Markets Outlook Note: Forecasts as of October 20, Prices for 2015 are as of November

7 Developments in commodity markets and price outlook Summary Across the board weakening in commodity prices and across the board downward adjustments to price forecasts: o Crude oil prices have been fluctuating around $45/bbl since August 2015 from $110/bbl in June o Agricultural prices have weakened as well, down more than 10% since a year ago. o Metal prices are down 25% since a year ago. o All three industrial commodity price indices (energy, metals, and agricultural raw materials) have declined by similar magnitudes (about 40 percent each) since their early 2011 peaks. Causes of the price weakness include: o Well-supplied markets for industrial commodities (in turn a reflection of past investments due to high prices). Increased oil production by OPEC, notably Iraq and Saudi Arabia. o Good crop harvests during the past 3 years in the case of agriculture. o Strong US dollar and likely tightening of financial conditions. o Weak economic growth, especially in emerging economies where most commodity demand growth takes place. Commodity prices are expected to increase (albeit marginally) in 2016 and Commodity prices and forecasts (2010 = 100) Prices (F=forecast) Change (%) F 2017F Energy Non-Energy Metals Agriculture Food Beverages Raw Materials Fertilizers Memorandum items Crude oil (US$/bbl) Gold (US$/toz) 1,266 1,174 1,155 1, Source: World Bank, Commodity Markets Outlook Note: Forecasts as of October 20, Prices for 2015 are as of November

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9 Oil price movements: Sources, channels, and impacts Source Channel Oil vs all commodities Impact on prices Growth prospects Demand Industrial (not food) commodities Strong growth lead to high industrial commodity prices (not food prices due to Engels Law) Substitution technologies Demand Some commodities Less consumption (through substitution away from oil to other energy sources) lowers prices Production technologies Supply Crude oil and natural gas Better production technologies lead to lower prices (shale technology in the U.S.) Geopolitical concerns Supply Crude oil and natural gas Restriction of supplies due to security concerns in Middle East and Central Asia induce high prices Policies Supply & demand Crude oil (OPEC), food commodities (biofuels) Restriction of supplies due to OPEC policies induce high oil prices; biofuels, which displace oil, cause lower oil prices but higher food prices Macroeconomic fundamentals Supply & demand All commodities Appreciation of the US dollar lowers prices, interest rate movements have mixed impact

10 Oil prices are driven (mostly) by 3 unconventional sources The new oil map Oil sands (Canada) Crude oil production Conventional (OPEC & non-opec) Unconventional (mostly non-opec) Existing production Biofuels (Global) Shale oil (United States) Shale oil reserves (Russia, China, Argentina, Libya) Potential sources Arctic exploration (U.S., Russia, Canada, Greenland, Norway) Further sea exploration (Brazil, Mexico, West Africa) Source: IEA, BP Statistical Review, and World Bank estimates.

11 (1) US shale The new oil map Oil sands (Canada) Crude oil production Conventional (OPEC & non-opec) Unconventional (mostly non-opec) Existing production Biofuels (Global) Shale oil (United States) Shale oil reserves (Russia, China, Argentina, Libya) Potential sources Arctic exploration (U.S., Russia, Canada, Greenland, Norway) mb/d U.S. oil production Further sea exploration (Brazil, Mexico, West Africa) Source: IEA, BP Statistical Review, and World Bank estimates.

12 mb/d Crude oil production The new oil map Conventional (OPEC & non-opec) Unconventional (mostly non-opec) Existing production Potential sources 1. U.S. oil production (2) Canadian oil sands Oil sands (Canada) Biofuels (Global) Shale oil (United States) Shale oil reserves (Russia, China, Argentina, Libya) Arctic exploration (U.S., Russia, Canada, Greenland, Norway) Further sea exploration (Brazil, Mexico, West Africa) mb/d Canadian oil production Source: IEA, BP Statistical Review, and World Bank estimates.

13 mb/d Crude oil production The new oil map Conventional (OPEC & non-opec) Unconventional (mostly non-opec) Existing production Potential sources Oil sands (Canada) Biofuels (Global) Shale oil (United States) Shale oil reserves (Russia, China, Argentina, Libya) Arctic exploration (U.S., Russia, Canada, Greenland, Norway) Further sea exploration (Brazil, Mexico, West Africa) (3) Biofuels mb/d mb/d of oil equivalent Canadian oil production 1. U.S. oil production 3. Global biofuel production Source: IEA, BP Statistical Review, and World Bank estimates

14 The U.S. added some 1 mb/d of oil Million barrels per day mb/d mb/d mb/d mb/d 7 J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O Source: International Energy Agency and World Bank Note: U.S. oil output includes biofuels. Last observation is October The solid line for 2015 is the October projection.

15 Million barrels per day 13 contrary to expectations Solid lines: Actual for the year Dots: Projected for the year on the specific month 7 J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O Source: International Energy Agency and World Bank Note: U.S. oil output includes biofuels. Last observation is October The solid line for 2015 is the October projection.

16 this additional oil Mb/d, changes since 2010Q4 4.5 United States Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q Source: International Energy Agency and World Bank Note: Last observation 2015Q3

17 initially accounted for losses elsewhere Mb/d, changes since 2010Q4 4.5 Iran Libya Syria Yemen United States Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q Source: International Energy Agency and World Bank Note: Last observation 2015Q3

18 but eventually created surplus conditions in 2014Q2 Mb/d, changes since 2010Q4 4.5 Iran Libya Syria Yemen United States Net Changes Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q Source: International Energy Agency and World Bank Note: Last observation 2015Q3

19 in turn, changing oil from outlier Rubber Cotton Nickel Coal Palmoil Silver Oil Tin Coffee (arabica) Copper Platinum Wheat Maize Aluminum Lead Soybeans Rice Zinc Gold Cocoa Tea Price change from 2011Q1 to 2014Q2 (percent) Source: World Bank

20 to mainstream 2011Q1-2014Q2 2014Q2-2015Q3 Rubber Cotton Nickel Coal Palmoil Silver Oil Tin Coffee (arabica) Copper Platinum Wheat Maize Aluminum Lead Soybeans Rice Zinc Gold Cocoa Tea Price change from 2011Q1 to 2015Q3 (percent) Source: World Bank

21 The surplus of 2014Q2 was followed by: (1) Iraq and Libya surprize 1. Oil production: Iraq and Libya during JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Source: IEA

22 (2) Appreciation of the U.S. dollar 1. Oil production: Iraq and Libya during JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 95 US$ = 100 in Oil price and the U.S. $ US$ per barrel Oil price [right] % down US$ [left] 14% up Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Source: IEA, Bloomberg, FRED. Notes: Last observation for exchange rate and oil prices is November 30,

23 Source: IEA, Bloomberg, FRED, and World Bank. Notes: Last observation for exchange rate and oil prices is November 30, (3) OPEC s changing objective JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC US$ = 100 in 1973 Oil price [right] US$ [left] 1. Oil production: Iraq and Libya during Oil price and the U.S. $ 60% down 14% up US$ per barrel Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct OPEC s changing objectives Following the East Asian financial crisis when oil dropped below $10/bbl, OPEC began setting a price target range, initially set at $20-25/bbl and gradually reaching $ /bbl. In the face of weakening demand and increasingly strong supplies from unconventional sources, in its November 27, 2014 meeting, OPEC decided not to cut production in order to defend market share. Following mb/d the decision, Brent prices plunged 10 percent. It was the first time in recent history when OPEC took such a bold move. An earlier, similar move was taken in 1985/86. The decision most likely reflects the realization that global commodity markets cannot be managed for long, regardless the nature of the commodity. Maintaining high and stable prices through commodity agreements not only attracts suppliers from countries not bound by the agreements but also encourages development of substitute products: o The International Tin Agreement ( ) had two implications: (i) Artificially high tin prices made non-member producers more competitive; (ii) it encouraged the use of aluminum, a substitute product. o The International Coffee Agreement ( ) attracted new producers, including Vietnam (not member of the Agreement), which is now world s second largest coffee supplier.

24 The oil price plunge led to a sharp decline in the U.S. rig count 160 US$/bbl Rig count 2, Oil price, WTI [left] Rig count [right] 1,600 1, Jan-07 Aug-07 Mar-08 Oct-08 May-09 Dec-09 Jul-10 Feb-11 Sep-11 Apr-12 Nov-12 Jun-13 Jan-14 Aug-14 Mar-15 Oct-15 Source: Baker Hughes, Bloomberg, and World Bank Note: Weekly data, last observation November 15, 2015.

25 Not only low oil prices are reflected in elevated OECD stocks Million barrels 3,000 OECD stocks 2,900 2,800 2,700 2,600 2,500 Jun-14 Aug-14 Oct-14 Dec-14 Feb-15 Apr-15 Jun-15 Aug-15 Source: International Energy Agency

26 and OPEC s higher oil production OECD stocks OPEC production Million barrels 3,000 Million barrels 39 2, , , ,600 2,500 Jun-14 Aug-14 Oct-14 Dec-14 Feb-15 Apr-15 Jun-15 Aug Jun-14 Aug-14 Oct-14 Dec-14 Feb-15 Apr-15 Jun-15 Aug-15 Oct-15 Source: International Energy Agency

27 but Iran could put further pressure on oil prices An international agreement on Iran s nuclear program was reached in July 2015 and is expected to be implemented in the first half of Sanctions will be suspended at that time and terminated in When sanctions are lifted: First, Iran could immediately start exporting from its 40 million barrels of floating storage of oil, of which more than half is condensate. And, within a few months of sanctions being lifted, Iran could increase crude oil production by mb/d, potentially reaching a 2011 pre-sanctions level of 3.6 mb/d. In the long term: Iran could reach pre-revolution and Iran-Iraq war level of oil production (about 6 mb/d) if it attracts foreign investment and technical assistance. Iran has the world s fourth largest proved oil reserves (9.3% of world total) and the largest proved natural gas reserves (18.2% of world total). Thus, Iran could become a key player in global energy markets, if it attracts foreign investment and know-how.

28 with potential to mb/d 7 Consumption Net exports Sanctions Escalation Source: BP Statistical Review. Note: Iranian production includes crude oil and liquids.

29 (a) return to pre-sanctions level within mb/d 7 Consumption Net exports Sanctions Escalation Source: BP Statistical Review. Note: Iranian production includes crude oil and liquids.

30 and (b) produce even more crude if financing is provided... mb/d 7 World share: 10.13% World share: 4.1% Consumption Net exports Real oil price [right] US$/bbl 140 Iranian Revolution, 1979 Sanctions Escalation, (?) Iran-Iraq War, Source: BP Statistical Review. Note: Iranian production includes crude oil and liquids. 0

31 ... given its large oil reserves Proved oil reserves Venezuela Saudi Arabia Canada Iran, Islamic Rep. Iraq Russian Federation 9.3% of world total Kuwait United Arab Emirates United States Libya Nigeria Kazakhstan Qatar China Brazil Source: BP Statistical Review and World Bank billion barrels

32 ... and even larger natural gas reserves Proved oil reserves Proved natural gas reserves Venezuela Iran, Islamic Rep. Saudi Arabia Russian Federation Canada Qatar Iran, Islamic Rep. Turkmenistan Iraq Russian Federation 9.3% of world total United States Saudi Arabia 18.2% of world total Kuwait United Arab Emirates United Arab Emirates Venezuela United States Nigeria Libya Algeria Nigeria Australia Kazakhstan Iraq Qatar China China Indonesia Brazil Canada billion barrels trillion cubic metres Source: BP Statistical Review and World Bank.

33 The oil price plunge brought energy prices closer together US$/mmbtu Crude oil (World Bank average) Natural gas (U.S.) 0 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Source: World Bank Note: Last observation is November 2015 Coal (Australia)

34 and natural gas prices as well US$/mmbtu Japan (LNG) 10 Europe 5 U.S. 0 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Source: World Bank Note: Last observation is November 2015

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36 Index, nominal terms, 2010 = Virtually all agricultural prices have declined as well Agricultural price indices 130 Food Agricultural raw materials (includes natural rubber) Beverages 50 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Source: World Bank

37 including grains Index, nominal terms, 2010 = Agricultural price indices US$/mt 500 Grain prices US$/mt Food Rice [right] Wheat [left] Agricultural raw materials (includes natural rubber) Beverages 200 Maize [left] Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan Source: World Bank

38 Index, nominal terms, 2010 = Agricultural price indices edible oils and oil seeds US$/mt 500 Grain prices US$/mt Food Rice [right] Wheat [left] Agricultural raw materials (includes natural rubber) Beverages 200 Maize [left] Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan US$/mt 750 Palm oil [right] Soybeans [left] Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Source: World Bank Edible oil & oilseed prices US$/mt

39 Index, nominal terms, 2010 = and agricultural raw materials Agricultural price indices US$/mt 500 Grain prices US$/mt Food Rice [right] Wheat [left] Agricultural raw materials (includes natural rubber) Beverages 200 Maize [left] Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 US$/mt 750 Palm oil [right] Soybeans [left] Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Source: World Bank Edible oil & oilseed prices US$/mt Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 US$/kg 7 Agricultural raw material prices 6 5 Natural rubber Cotton 1 0 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan

40 And, despite a strong El Niño episode under way ENSO index 2 El Niño episodes Forecast as of October La Niña episodes Source: National Oceanic Atmospheric Administration (NOAA; historical data through August 2015) and Earth Institute (forecasts from September 2015 to June 2016, as of September 17, 2015). Notes: The ENSO (El Niño Southern Oscillation) Index represents a centered three-month mean SST (Sea Surface Temperature) anomaly for the Niño 3.4 region (i.e.,5on-5os, 120o -170oW). According to the NOAA, events are defined as five consecutive overlapping three-month periods at or above the +0.5o anomaly for El Niño events and at or below the -0.5 anomaly for La Niña events. The threshold is further broken down into Weak (with a 0.5 to 0.9 SST anomaly), Moderate (1.0 to 1.4), Strong (1.5 to 1.9) and Very Strong ( 2.0) events. An event to be categorized in any of the above categories it must have equaled or exceeded the threshold for at least three consecutive 3-month periods. Note that the value of the index can change up two months after the real time data become available because of a filtering process applied to the data.

41 prices declined significantly Rice Copper Natural Rubber Maize Cotton Soybeans Coffee (arabica) Palmoil Sugar Wheat Source: U.S. Department of Agriculture and World Bank Price change from 2014Q2 to 2015Q2

42 not surprisingly given how well-supplied markets are Rice Copper Natural Rubber Stocks-to-Use ratio 30% 25% 2006/07 10-yr average 2015/16 Maize Cotton 20% Soybeans 15% Coffee (arabica) Palmoil 10% Sugar Wheat 5% Source: U.S. Department of Agriculture and World Bank Price change from 2014Q2 to 2015Q2 0% Maize Wheat Rice

43 and also based on the history of agricultural prices Index, deflated by U.S. CPI, Jan. 2010= Agriculture price index Source: World Bank

44 and El Niño s muted impact Index, deflated by U.S. CPI, Jan. 2010= Agriculture price index ENSO Index peaks % -19.6% -0.9% -2.2% -6.5% -7.3% % -2.9% The strongest El Niño on record, 1997/ Source: World Bank and NOAA. Note: The ENSO peaks reflect values greater than 1. The numbers denote percent changes of the six-month average price index leading to the episode compared to the previous six-month period (bold) and the corresponding six-month period of the previous year (italic). The last observation for both agricultural price index and El Niño is September % 9.8% 3.8% -3.5% -7.1% -14.8%

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46 Metal prices declined as well, including copper and iron ore US$/mt 10,000 Copper and Iron Ore prices Copper [left] US$/mt 200 8, , ,000 Iron ore [right] 80 2,000 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan Source: World Bank and World Bureau of Metal Statistics

47 tin and nickel US$/mt 10,000 Copper and Iron Ore prices Copper [left] US$/mt 200 US$/mt 35,000 Tin and Nickel prices US$/mt 55,000 8, ,000 Tin [left] Nickel [right] 45,000 25,000 35,000 6, ,000 4,000 Iron ore [right] 80 15,000 10,000 25,000 15,000 2,000 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan ,000 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 5,000 Source: World Bank and World Bureau of Metal Statistics

48 on fears of slowing Chinese demand US$/mt 10,000 8,000 6,000 Copper and Iron Ore prices Copper [left] US$/mt US$/mt ,000 30, Tin [left] 25, ,000 Tin and Nickel prices Nickel [right] US$/mt 55,000 45,000 35,000 4,000 Iron ore [right] 80 15,000 10,000 25,000 15,000 2,000 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan ,000 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 5,000 5 Million metric tons Metal consumption 4 3 World, excluding China 2 1 China - Jan-95 Jan-97 Jan-99 Jan-01 Jan-03 Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15 Source: World Bank and World Bureau of Metal Statistics

49 while precious metal prices was no exception US$/mt 10,000 8,000 6,000 Copper and Iron Ore prices Copper [left] US$/mt US$/mt ,000 30, Tin [left] 25, ,000 Tin and Nickel prices Nickel [right] US$/mt 55,000 45,000 35,000 4,000 Iron ore [right] 80 15,000 10,000 25,000 15,000 2,000 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan ,000 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 5,000 5 Million metric tons Metal consumption US$/toz 2,400 Precious metal prices US$/toz World, excluding China 2,000 1,600 1,200 Platinum [left] Gold [left] China Silver [right] 15 - Jan-95 Jan-97 Jan-99 Jan-01 Jan-03 Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Jan-15 Source: World Bank and World Bureau of Metal Statistics - Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 5

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51 On the growth side, there are headwinds Percent 10 High income Developing World Source: World Bank (forecasts based on the October 2015 update)

52 On the growth side, there are headwinds Percent 10 High income Developing World Source: World Bank (forecasts based on the October 2015 update)

53 as evidenced by the consistency of downward revisions Percent 7 Forecast in January of previous year Forecast in January of current year Actual growth Source: World Bank, Global Economic Prospects Notes: Growth refers to developing countries. Actual for 2015 is the October 2015 forecast.

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55 Oil prices stand at exactly their 50-year average US$/bbl, deflated by U.S. CPI (2014 terms) average price: $48.38/bbl Source: World Bank Note: Last observation is November 2015

56 with remarkable similarities between the 1985/86 & 2014/15 price collapses US$/bbl, deflated by U.S. CPI (2014 terms) OPEC changes policy to regain market share Price drops 66% in 82 days First Gulf war Price drops 48% in 71 days 2008 financial crisis Price drops 77% in 113 days average price: $48.38/bbl 30 OPEC changes policy to defend market share Price drops 51% in 83 days Source: World Bank Note: Last observation is November 2015

57 Although prices have declined considerably Index, real (2010 = 100) Agriculture 80 Metals 40 Energy Source: World Bank Note: 2015 figures are forecasts as of October 2015

58 Index, real (2010 = 100) they are still higher than the average Agriculture Changes in real prices from from 1998 to 2015 to 2015 Agriculture: +23% +21% Energy: +87% +167% Metals: +21% +45% 80 Metals 40 Energy Source: World Bank Note: 2015 figures are forecasts as of October 2015

59 Begging the question: Is it all over again? 160 Index, real (2010 = 100) 120 Agriculture 80 Metals 40 Energy Source: World Bank Note: 2015 figures are forecasts as of October 2015

60 The latest edition of the World Bank s Commodity Markets Outlook was published on October 20, 2015 The next edition will be published on January 20, 2016 Prices ( pink sheet ) are updated on the third business day of each month