Top oil traders see steady demand despite economic headwinds

Economic headwinds have yet to significantly erode the world’s demand for oil, top oil traders said at the Argus European Crude Conference in Geneva on Tuesday.

The forecasts by senior executives of the world’s main commodity trading houses may buttress the case for more resilient oil prices after recession fears sent them plunging by around a quarter in the last three months to near $90 a barrel.

“All the different factors suggest, yes, we may be heading into a slowdown but it will be shorter and shallower than people are expecting,” Trafigura’s chief economist Saad Rahim said.

The falling oil prices and months of severe volatility have spooked the market, with major consumer countries still tapping strategic stocks to cool prices while top exporters in the OPEC+ alliance may take the opposite view and boost output this week.

Frederic Lasserre, global head of market research & analysis at Gunvor Group said that demand remained steady, adding that he saw a short, sharp recession.

“Oil demand … if you look at the latest data, it’s still doing OK. We were expecting some demand destruction, it did not really happen. Some countries had subsidies but still. We have been surprised,” he said.

Laserre added we expect a visible impact on gas demand as the switch from gas to oil accelerates in Q4 and Q1.

Brent crude ought to stay above $75 a barrel at the end of next year, Rahim and Lasserre said.