The World Bank slashed its outlook for most global commodities in its quarterly Commodity Markets Outlook Tuesday as emerging economies deal with a sharper-than-expected downturn. The Washington-based agency warned that oversupply in the commodities markets — which sent prices crashing in 2015 — will continue to dominate the market through 2016.

The projected price of crude oil for 2016 was cut to $37 a barrel, down from $51 in the World Bank’s October report, citing the sooner-than-anticipated resumption of exports by Iran and strong production in the United States. Oil prices were expected to decline by another 27 percent in 2016, on an annual average, the lending agency said in a statement on its website. The World Bank used an equally weighted average of Brent, Dubai and West Texas Intermediate prices.

The report also projected that prices for 37 of the 46 internationally traded commodities would decline in 2016 due to lower demand from emerging economies. “Emerging market economies have been the main sources of commodity demand growth since 2000. As a result, weakening growth prospects in these economies are weighing on commodity prices,” the report said. 

Iron ore prices would see the biggest declines, the report predicted, as cheap supply continued to outstrip demand. Iron ore prices could fall by a fourth to $42 a metric ton by the end of 2016, the Bank said. In comparison, nickel may fall 16 percent and copper 9 percent.

The report also said there was a case for commodity prices to rise slightly over the next two years but added that the global economy faced significant risk of a deeper slowdown. The Bank revised its growth forecast for emerging and developing economies to 4 percent this year, down from an expected 4.6 percent previously.

Earlier in January, the World Bank projected global growth of 2.9 percent for 2016. While higher than the previous year’s 2.4 percent growth, the forecast still represents a downgrade from the international lender’s earlier estimate of 3.3 percent, announced in June.

The biggest risk was a sharper than expected slowdown this year in China and other big commodity-importing emerging economies, World Bank, a major lender to developing nations, said.

"Low commodity prices are a double-edged sword, where consumers in importing countries stand to benefit while producers in net exporting countries suffer," said Ayhan Kose, director of the World Bank's Development Prospects Group.