Global oil demand won’t meaningfully recover for at least 18 months, said the heads of the world’s biggest independent trading houses.
Speaking at the FT Commodities Global Summit on Tuesday, some of the most influential people in the oil market offered a dim outlook.
“It is very hard to be bullish on the oil price now and into Christmas,” said Ben Luckock, co-head of oil trading at Trafigura Group.
Mercuria Energy Group Chief Executive Marco Dunand said oil consumption could rebound from the coronavirus in about 18 months, while Torbjorn Tornqvist, his counterpart at Gunvor Group Ltd., and hedge fund manager Pierre Andurand both saw the timeframe closer to two years.
Daily consumption is still 4 million to 5 million barrels day below where it was expected to be before the pandemic, said Russell Hardy, the chief executive of Vitol Group, the biggest independent oil trader. He doesn’t expect a meaningful pickup in demand until at least the summer of 2021.
Gunvor and Mercuria each handle more than 2 million barrels of oil and petroleum products per day, giving them keen insight on global need for hydrocarbons. Vitol traded more than 8 million barrels a day in 2019 though volumes have dropped significantly this year as economies were locked down to slow the spread of Covid-19.
While China’s oil demand is more or less back to pre-pandemic levels, consumption in Europe and the Americas remain weak, Gunvor’s Tornqvist said. “The picture doesn’t look good right now,” he said. “Short-term, the demand question is such that risk is probably to the downside.”
Source: Bloomberg
