Brent Crude oil prices are set to drop into the $60s per barrel range soon, according to one of the largest independent oil traders, Trafigura.
Brent Crude, the international benchmark, was trading at $71.63 a barrel, up by 0.65% on the day, early on Monday, as both benchmarks rebounded following a major selloff last week. Oil prices dropped to their lowest level so far this year and settled on Friday at the lowest levels since June 2023.
Ben Luckock, Global Head of Oil at Trafigura, expects Brent to drop into the $60s handle, although he warned that traders shouldn’t put all their eggs in the basket of shorts.
The price of Brent is “probably going to go into the $60s some time relatively soon,” Luckock said at the Asia Pacific Petroleum Conference (APPEC) conference in Singapore on Monday.
But, he warned that “It’s dangerous because there’s so many events out there that can ruin your day,” in remarks at a panel at the conference carried by Bloomberg.
“I wouldn’t put all your chips on the table being short,” Luckock said.
The mood in the oil market has been increasingly bearish in recent weeks amid concerns about oil demand in China, which isn’t living up to earlier expectations of leading another year of growth in global consumption.
Another major oil trader, Gunvor, also expects Brent at $70. Gunvor’s co-founder and chairman Torbjorn Tornqvist told the APPEC conference that Brent’s fair value is now $70 a barrel as supply outpaces demand.
The problem with oversupply is not the OPEC+ policy but the fact that the group doesn’t have control over the jump in non-OPEC+ supply, Tornqvist said.
The bearish forecasts from Gunvor and Trafigura came just as Morgan Stanley cut again its forecast of Brent oil price to average $75 a barrel in the last quarter of the year. The outlook downgrade was the second in just two weeks after at the end of August the Wall Street bank cut its Brent price forecast for the fourth quarter to $80 per barrel, down from $85 expected earlier.
By Charles Kennedy for Oilprice.com