• 3 minutes Looming European Gas Crisis in Winter and North African Factor - a must read by Cyril Widdershoven
  • 7 minutes "Biden Targets Another US Pipeline For Shutdown After 'Begging' Saudis For More Oil" - Zero Hedge Monday Nov 8th
  • 12 minutes "UN-Backed Banker Alliance Announces “Green” Plan to Transform the Global Financial System" by Whitney Webb
  • 11 mins GREEN NEW DEAL = BLIZZARD OF LIES
  • 1 day Building A $2 Billion Subsea Solar Power Cable From Chile To China
  • 1 hour Hunter Biden Helped China Gain Control of Cobalt Mines in Africa
  • 4 hours CO2 Electrolysis to CO (Carbon Monoxide) and then to Graphite
  • 8 hours Microbes can provide sustainable hydrocarbons for the petrochemical industry
  • 2 hours NordStream2
  • 7 hours OPEC+ Expects Large Oil Glut In Early 2022
  • 5 hours Ukrainian Maidan after 8 years
  • 6 mins President Biden’s Nuclear Option Against OPEC+ - Waste of Time
  • 7 hours Forecasts for Natural Gas
  • 3 days "Gold Set To Soar As Inflation Fears Mount" by Alex Kimani
  • 1 day Big Bounce: Russian gas amid market tightness - new report by Oxford Institute for Energy Studies
$70 Oil Won't Keep OPEC Happy

$70 Oil Won't Keep OPEC Happy

OPEC is reportedly reconsidering its…

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. 

More Info

Premium Content

Trading Giant Gunvor: $60 Could Be The Ceiling For Oil Prices

Oil prices are unlikely to soar much above the $60 per barrel mark, considering that this price level would incentivize a lot of oil supply, including from the United States, Torbjörn Törnqvist, chief executive at one of the world’s largest independent oil traders, Gunvor, told Bloomberg on Friday.

“Once you hit $60 a barrel, any oil production out there is profitable, and the incentive for oil producers to hold back erodes real fast,” Törnqvist told Bloomberg in an email.

Brent Crude prices were cents away from reaching $60 early on Friday, after a strong rally this week, driven by the ongoing production cuts from OPEC+, the extra million-barrel-per-day reduction in Saudi Arabia’s output, strong Asian demand, and risk appetite on the markets.

Yet, according to Gunvor’s chief executive, these gains will be capped, especially in the first half of this year.

“The high-$50s are the higher end of our expectation for the first half, and we’re not sure we will see much higher,” Törnqvist told Bloomberg.

Global demand for oil products right now is still lagging behind the levels from just before the pandemic and is up to 5 million barrels per day lower than at the start of 2020, the executive said.

China is a strong driver of demand, while Europe is the worst-hit market. The U.S. is more stable than Europe with just “a couple million barrels loss in demand,” according to Törnqvist.

At the start of this week, Goldman Sachs issued another bullish message for oil markets, saying in a note that it expected global oil demand to recover to pre-pandemic levels of 100 million bpd by August this year. According to Goldman, the oil market was in a deficit of 2.3 million bpd in the final quarter of 2020. With supply still tight at the start of 2021, the immediate future for prices is bright despite expectations for a slow demand recovery.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment
  • Mamdouh Salameh on February 05 2021 said:
    Even if it is one of the world’s largest independent oil traders, Gunvor can’t just pick an oil price out of thin air and say this could be the ceiling for oil prices without providing the basis of its projection.

    I have been for quite a long time projecting that Brent crude price is heading towards $60 a barrel in the first quarter of 2021 rising further to $70-$80 in the third quarter and averaging $60-$65 in 2021. Moreover, Global oil demand is projected to recover to pre-pandemic level of 101 million barrels a day (mbd) by the middle of 2021.

    But I based my projections on improving fundamentals in the global oil market, almost 100% compliance by OPEC+ members with the agreed production cuts, an expanding global rollout vaccination and accelerating depletion of global oil inventories in addition to growing demand for refined products in the United States and record-breaking crude oil imports by both China and India.

    It is no good for Gunvor’s chief executive, to say that once the oil price hits $60, the incentive for oil producers to hold back erodes real fast. This is a fact of life. But with the global oil industry delaying (probably indefinitely) $131 bn of oil and gas projects that were slated for approval in 2020, crude oil prices could be headed towards $100 by the end of 2022 and 2023 because of global oil supply deficit that could hit 15 mbd.

    Furthermore, if Brent crude is going to hit $60 any moment now despite the fact that the bulk of the global economy is still in lockdown, it will certainly rise to $80 this year with the widening of the global rollout of vaccines.

    High oil prices invigorate the global economy by stimulating the three biggest chunks that make up the global economy, namely, global investments, the economies of the oil-producing countries and the global oil industry thus creating more demand for oil.

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

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News