Trafigura Expects Oil Prices to Fall into the $60s

SEATTLE (Scrap Monster):  Ben Luckock, global head of oil at Trafigura, while addressing the Asia Pacific Petroleum Conference (APPEC) 2024 held in Singapore, told that oil prices are likely to fall into the $60s relatively soon. The market just wants to know that OPEC is not going to bring back production or at best bring it back slower than anticipated and on a deferred basis, he added.

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According to Torbjorn Tornqvist, co-founder and chairman of energy trader Gunvor, the fair value of oil is $70 per barrel as the current global oil production is more than consumption and the balance is expected to worsen over the next few years. There is substantial growth in production outside OPEC, which the organization s unable to control, he said.

As per the International Energy Agency (IEA) estimates, the oil supply growth is expected to reach 770,000 barrels per day (bpd) in 2024, with total supply expected to hit a record of 103 million bpd. The growth is anticipated to witness over two-fold surge in 2025 to reach 1.8 million bpd.

Jim Burkhard, vice president of research at S&P Global Commodity Insights noted that the significant growth in the U.S. continues to present major challenge for OPEC+ decision making. He sees increased oil supply from OPEC+ next year.