Global commodity prices strengthened in the first quarter of 2018 and are expected to be higher on average this year than in 2017.

Broad-based price increases have been supported by both demand—as economic growth has strengthened—and supply factors, including restraint by major oil producers, trade tensions, and economic sanctions. Energy prices surged 10 percent in the first quarter of 2018 (quarter over quarter), led by oil and natural gas.

Oil prices rose 10 percent, averaging $64.60 per barrel over the quarter, and have more than doubled since bottoming out in early 2016. Strong oil demand and greater-than-expected compliance by the 22 Organization of the Petroleum Exporting Countries (OPEC) members and non-OPEC producers to their agreed production cuts helped draw inventories down.

Meanwhile, rising geopolitical concerns, especially the prospect of renewed sanctions against Iran, and tensions between... — blog.wb.org/blogs