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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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The World's Largest Oil Traders Don't Expect Prices To Rise Until 2021

The top executives at some of the world’s largest independent oil traders do not expect global oil demand to materially improve over the next six to nine months—Instead, they expect oil prices to remain stuck in a narrow range in the $40s at least until the middle of 2021.

The senior executives at commodity trading giants Vitol, Mercuria, and Gunvor are not optimistic about the demand recovery in the near term, they said at the FT Commodities Global Summit on Tuesday.   

Russell Hardy, chief executive at the biggest independent oil trader in the world, Vitol Group, expects global oil demand to stay flat until the summer of 2021, and has “modest expectations” about oil prices, Reuters quoted Hardy as telling the summit.

Hardy himself appeared quite bullish on oil inventories drawing down two weeks ago. The world’s stockpiles of oil have diminished by around 300 million barrels since peaking at 1.2 billion barrels early this summer, and are expected to decline by another 250 million-300 million barrels between September and December, Hardy told Bloomberg in mid-September.  

This weekend, Vitol’s executive committee member Chris Bake said on Gulf Intelligence’s weekly energy podcast that demand is looking more uncertain amid a “huge amount of uncertainty” about COVID-19, economies, monetary stimulus, and oil demand.

“The conventional wisdom going into the fourth quarter was that things were going to improve,” Bake said, noting that “it doesn’t feel like we have a huge catalyst” for the rest of the year.

Mercuria’s CEO Marco Dunand said on the FT summit on Tuesday that he doesn’t see oil demand recovering to the pre-crisis levels for a few years, and expects oil prices to remain broadly flat around $45 per barrel over the next six months.

Torbjörn Törnqvist, chief executive at Gunvor, also sees oil prices staying in the $40s until the middle of 2021, ranging from mid- to high $40s.  

By Tsvetana Paraskova for Oilprice.com

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Leave a comment
  • Mamdouh Salameh on September 29 2020 said:
    They are so fickle that they keep changing their projections from one day to the other hoping one of their projections will prove right. They have instead to look at the fundamentals in the global oil market. These are strong enough to justify in my opinion prices of $45-$50 a barrel during the fourth quarter of this year and $60 in early 2021.

    The proof is that global oil inventories are declining steadily albeit slowly whilst China’s crude oil imports are still roaring and the world is continuing to ease lockdowns wherever possible.

    And while a second wave of COVID-19 pandemic is casting dark clouds over the global economy and oil demand, countries of the world are far better prepared and experienced to tackle a second wave of the pandemic than at the start of the year. Furthermore, the development of anti-COVID vaccines is getting closer by the day.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

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