Trafigura, one of the world’s largest independent oil traders, has forecasted that Brent Crude oil prices will soon drop into the $60s per barrel range.
As of early Monday, Brent Crude, the international benchmark for oil, was trading at $71.63 per barrel. This marked a 0.65% increase for the day, following a significant decline last week. The price had hit its lowest point of the year and closed at its lowest level since June 2023.
Ben Luckock, Trafigura’s Global Head of Oil, shared this prediction during the Asia Pacific Petroleum Conference (APPEC) in Singapore. He cautioned traders, however, about becoming overly confident in short positions. “Brent is likely to fall into the $60s soon,” Luckock said. Yet, he warned, “There are many factors that could unexpectedly change the market,” emphasizing that traders should not bet entirely on a decline.
The sentiment in the oil market has turned increasingly negative in recent weeks. Concerns about disappointing oil demand in China have overshadowed earlier expectations of strong growth in global consumption.
Another major oil trader, Gunvor, also predicts Brent Crude will stabilize around $70 per barrel. Torbjorn Tornqvist, Gunvor’s co-founder and chairman, stated that the fair value for Brent is currently $70, attributing the oversupply issue to increased non-OPEC+ production rather than OPEC+ policies.
This bearish outlook from Trafigura and Gunvor coincides with a recent downgrade by Morgan Stanley. The bank has revised its forecast for Brent Crude oil prices to an average of $75 per barrel for the last quarter of the year. This adjustment follows a previous cut at the end of August, when Morgan Stanley had reduced its forecast from $85 to $80 per barrel.