The World Bank has lowered its forecast for crude oil prices for 2016.

It had previously predicted prices at $51 (£35.5) per barrel in October but has reduced it to $37 per barrel.

The lower forecast reflects a number of supply and demand factors, it states.

“These include sooner-than-anticipated resumption of exports by the Islamic Republic of Iran, greater resilience in US production due to cost cuts and efficiency gains, a mild winter in the Northern Hemisphere and weak growth prospects in major emerging market economies,” the World Bank’s report adds.

Oil prices fell by 47% last year and are expected to decline by an additional 27% this year on average.

However from their current lows, a “gradual recovery” is forecast over the course of the year.

The World Bank states: “First, the sharp oil price drop in early 2016 does not appear fully warranted by fundamental drivers of oil demand and supply and is likely to partly reverse. Second, high-cost oil producers are expected to sustain persistent losses and increasingly make production cuts that are likely to outweigh any additional capacity coming to the market. Third, demand is expected to strengthen somewhat with a modest pickup in global growth.”

The anticipated recovery in oil prices is however forecast to be smaller than the rebounds that followed sharp drops in 2008, 1998 and 1986, it adds.