The World Bank has cut its forecast for crude oil prices to $37 a barrel for 2016, from an earlier estimate of $51 a barrel made in October last year, citing growing supply glut and poor prospects of a rise in oil demand from emerging markets.

The bank expects the global oil demand to remain weak even as Iranian oil exports return, US production continues and Northern Hemisphere witnesses a mild winter.

Oil prices may fall by another 27% this year after slumping by 47% in 2015, the World Bank said in its annual Commodity Markets Outlook.

"Low prices for oil and commodities are likely to be with us for some time," said John Baffes, senior economist and lead author of the report.

The benchmark Brent crude prices traded at $31.20 a barrel on Wednesday, shedding some gains made in the previous session.

World Bank sees a gradual recovery in oil prices over the course of 2016, but expects the rebound to be not as sharp as seen in the previous cycles, including 2008, 1998 and 1986, when oil prices saw sharp declines.

Global brokerage Goldman Sachs had said in December last year that global glut and growth concerns may pressure the crude oil market further, leading oil prices to fall to as low as $20 a barrel in the coming months.

Last week, global rating agency Moody's Investors Serviceslashed its crude oil forecast for 2016 by $10 to $33 a barrel, citing continued oversupply in the global oil markets.

Moody's said the oil supply glut will continue to persist this year due to addition of 500,000 barrels per day (bpd) from Iran, even as the demand remains tepid.