Oil trading giant Trafigura sees Brent falling below $70 soon

Brent crude oil prices will soon fall into the $60 per barrel range, according to one of the largest independent oil traders, Trafigura.

Brent Crude, the international benchmark, was trading at $71.63 a barrel, up 0.65% on the day on Monday morning, as both benchmarks rebounded from a major selloff last week. Oil prices fell to their lowest level this year and settled on Friday at their lowest levels since June 2023.

Ben Luckock, Global Head of Oil at Trafigura, expects Brent to fall into the $60s, although he cautioned that traders should not put all their eggs in the shorts basket.

The price of Brent “will probably reach $60 relatively soon,” Luckock said at the Asia Pacific Petroleum Conference (APPEC) in Singapore on Monday.

But he warned that “It’s dangerous because there are so many events out there that can ruin your day,” in remarks at a panel at the Bloomberg conference.

“I wouldn’t put all your chips on the table being short,” Luckock said.

Sentiment in the oil market has been increasingly bearish in recent weeks amid concerns over Chinese oil demand falling short of earlier expectations to drive another year of global consumption growth.

Another major oil trader, Gunvor, also expects Brent at $70. Gunvor co-founder and chairman Torbjorn Tornqvist told the APPEC conference that the fair value of Brent is now $70 a barrel because supply exceeds demand.

The problem with oversupply is not OPEC+ policy, but the fact that the group has no control over non-OPEC+ supply growth, Tornqvist said.

The bearish forecasts from Gunvor and Trafigura came just as Morgan Stanley again cut its forecast for Brent oil prices to average $75 a barrel in the final quarter of the year. The outlook cut was the second in just two weeks after the Wall Street bank in late August cut its fourth-quarter Brent price forecast to $80 a barrel, down from $85 dollars expected earlier.

By Charles Kennedy for Oilprice.com

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