Global commodity traders Gunvor and Trafigura predict that oil prices may stabilize between $60 and $70 per barrel, driven by sluggish demand from China and persistent global oversupply. This outlook was shared during a conference on Monday, reflecting ongoing concerns about waning demand in major economies, including China and the U.S.
Despite initial expectations for summer demand to support prices, oil values have dipped from earlier highs of over $90 per barrel. Recent relief in the market followed OPEC+’s decision to delay a planned increase in oil output for October and November, but traders caution that this relief may be fleeting.
Ben Luckock, global head of oil at Trafigura, remarked, “The market got a little bit of sugar candy for two months, but really very little,” indicating that oil prices could soon fall into the $60 range. He emphasized the need for clarity on OPEC’s production strategy moving forward.
Torbjorn Tornqvist, co-founder of Gunvor, stated that the fair value of oil is around $70 per barrel, citing an oversupply situation where global production currently exceeds consumption—a trend expected to worsen in the coming years. He acknowledged OPEC’s effective management but noted that they do not control production growth outside the organization.
In early trading, oil futures briefly rose by a dollar due to a potential hurricane system approaching the U.S. Gulf Coast but later relinquished those gains, highlighting the market’s volatility.