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Ben Luckock, Trafigura’s Global Head of Oil interviewed by Bloomberg TV about the outlook for the oil market

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Published on11 Jan 2024

What’s the outlook for the oil market? Ben Luckock, our Global Head of Oil, spoke to Bloomberg News's Alix Steel and Guy Johnson on Thursday 11 January about the forces driving the performance of the world’s most traded commodity.

 Ben explained that oil markets remained relatively relaxed about threats to production in the Middle East because there were ample supplies elsewhere.

  I think the answer comes back to good old supply and demand, which the oil market has largely ignored for the last three or four years as we have gone from crisis to crisis,” he said. “Supply outperformed last year. The US probably grew by 1m barrels per day which was unexpected… and then there was Guyana and Brazil and other producers also growing."

  So, supply outstripped demand and that’s what markets are focused on. And the market is pretty relaxed about world events. The price tells you that”, Ben said, adding later in the interview: “We’re probably in a for a year of range bound prices… $5 each side of where it is now. “

  Asked if the US could increase oil output again in 2024, Ben said the recent burst of mergers and acquisition activity involving companies such as ExxonMobil and Chevron buying smaller rivals would result in “somewhat higher” production.

  The big players in this market have been spending huge amounts of money to really understand and push for efficiency. We have a lower growth target for this year; 300,000 to 400,000 barrels per day, but these are still big numbers. It all adds up to more than 13m b/d [of total production] in the US. So really very significant.”

Turning to China, Ben said it had accounted for around half of global oil demand growth last year but also noted the country’s big push into battery powered electric vehicles.

 

The data isn’t exactly clear but it may be that you will never see more gasoline consumed in China than you do this year. They are all-in on the EVs,” he said.

Watch the Bloomberg TV interview here.