Oil trader Gunvor sees crude stuck around $65 as stock drawdown slows
(Bloomberg) --The head of oil trader Gunvor Group Ltd. expects prices to remain stuck where they are as draws of excess stocks slow amid rising coronavirus cases in Europe.
“Oil prices are going to stay where they are - 65 ish - give or take a bit,” Torbjorn Tornqvist, the chairman and chief executive officer of Gunvor said in an interview.
“Given the development of the coronavirus, particularly in Europe, the demand growth has been much slower to come back. The U.S., actually, looks pretty good, but stocks are not coming down as fast as we thought,” he said.
Gunvor is one of the five-largest independent oil traders, handling more than 2.5 million barrels of crude and petroleum products a day, giving Tornqvist and his teams keen insight into physical market demand and supply flows.
Brent crude, the global benchmark, was trading down slightly at close to $65 a barrel on Tuesday. West Texas Intermediate dipped to near $61 a barrel in New York, ahead of a meeting of the OPEC producing countries this week.
Tornqvist said he expected delegates from the Organization of Petroleum Exporting Countries to keep production cuts in place for now, though it will become more difficult over time.
“There is a lot of spare capacity within OPEC. There is a lot of oil in the ground that can come in a relatively short-time if the price is right. I don’t expect a lot of upside here,” he said.
Taking a view on OPEC is straightforward, said Tornqvist, either you believe the producer group is going to defend the price of oil or you don’t. Gunvor’s CEO said he is the former.
