World growth is forecast at 4.5% in 2000, up from 1999's 3.25%. In 2001, growth is expected to slow to 3.5%-4.0%, the bank said.

World industrial activity is forecast to be firm in 2000, and there should be solid demand for industrial metals for the remainder of the year. But demand will fall off from the current high levels into 2001.

"Weaker demand will tend to pressure base metal prices as we move through 2001," David Thurtell, the bank's commodity strategist said. A forecast weakening in the U.S. dollar is likely to help maintain demand for base metals outside the U.S, but won't be enough to outweigh the impact of weaker industrial activity, it said.

(The Wall Street Journal)Metal stocks are forecast to continue declining in 2001. "This should keep upward pressure on prices, partially offsetting the impact of lower demand," the bank said.

Rising production will contribute to a modest decline in oil prices in the forecast period.

Brent crude oil prices are forecast to average US$22 a barrel in 2001, down from US$28.50 average forecast in 2000.

"With the demand for oil moderating in response to higher prices, and more modest economic growth and with supply increasing, we expect oil prices to retreat as we progress through the forecast period," Thurtell said.