By Robert Harvey and Dmitry Zhdannikov
LAUSANNE (Reuters) -Executives from the world’s top commodity trading houses expect a well-supplied oil market this year, with concerns remaining over global demand growth.
Oil prices could continue to soften as global supply rises, including with the Organization of Petroleum Exporting Countries and allies (OPEC+)’s plan to unwind voluntary output cuts in coming months, the executives said speaking at the FT Commodities Global Summit in Lausanne.
“There are some threats to supply, but by and large there is adequate supply for the next couple of years,” said Vitol Chief Executive Russell Hardy.
“There is more supply coming in the second half of the year, the OPEC tapering is going to begin, and so the market has anticipated all of that and reset from about $80 a barrel to about $70,” Hardy said during a keynote interview.
Gunvor’s Chief Executive Torbjorn Tornqvist had said earlier that supply growth will likely outpace demand.
“Prices have been stuck in the range of low $70s, and that’s probably a fair price,” he said, adding that if there were no interferences to supply anywhere then prices could move a bit lower.
“There are concerns about where demand is going to come from,” said Trafigura’s head of oil Ben Luckock, citing a potential peak in China’s gasoline demand, and both the U.S. and European economies “not looking particularly constructive”.
“The Iranian issue is the big outlier in what can happen to supply and demand balances,” Luckock said, with the caveat that he believes the new U.S. administration is also concerned about the oil price impact of a “maximum pressure” policy on Iran.
(Reporting by Robert Harvey and Dmitry Zhdannikov; Editing by Kirsten Donovan and Ed Osmond)
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