(EnergyAsia, October 26 2016, Wednesday) — Asia’s mostly energy-deficit economies are watching nervously as crude oil prices continue to defy bearish forecasts in recently reaching their highest levels in nearly a year.

Brent crude traded above US$53 a barrel in early October, with the possibility of holding or rising further the rest of the year on winter demand in northern Asia, stockbuild in China and India, and supply curbs by oil producers. If that happens, it would mark a doubling of the crude price since early this year when Brent sank below US$30.

The scenario of oil prices falling below US$20 a barrel presented in January by Goldman Sachs and Morgan Stanley is looking increasingly unlikely. Asia’s energy importers would have welcomed that as they have been the main beneficiaries of the energy price collapse since mid-2014. Instead, they could see a huge reversal of fortune if oil continues its recovery.

The US Energy Information Administration (EIA) expects Asian oil demand to grow 2.8% from 31.33 million b/d last year to 32.2 million b/d in 2016, and by a further 2.6% to 33.05 million b/d in 2017.With their unrestrained oil appetite, Asian economies face rising energy cost as the EIA has forecast the Brent crude price to increase from an average US$43.43 a barrel in 2016 to US$50.99 in 2017.

The World Bank is even more bullish as it expects crude prices to surge to an average US$55 a barrel next year from US$43 in 2016. The bank has estimated that Asian economies could lose between 0.2 and 0.5% of GDP for every US$10 a barrel increase in the crude price.

Much will depend on whether the Organisation of Petroleum-Exporting Countries (OPEC) members will exercise discipline to implement the cartel’s September 28 agreement to curb supply. OPEC members, which account for about one-third of global production, agreed to limit output to 32.5 to 33 million b/d, with details and a final decision to be deferred until a meeting on November 30. Russia has tentatively agreed to support OPEC’s decision to limit production.

The World Bank appears to believe the agreement has substance.

“The plan, which effectively ends two years of unrestrained production, marks an important policy shift for Saudi Arabia, OPEC’s largest producer,” said the bank.