The RN-Tuapsinsky refinery operated by Rosneft Oil Co. in Tuapse, Russia.
Andrei Rudakov | Bloomberg | Getty Images
SINGAPORE – As global oil traders and analysts gathered in Singapore last week for the annual Asia Pacific Oil Conference, oil’s plunge and its direction were at the forefront of everyone’s minds.
China, the main engine driving world oil demand, has been underperforming. exist International Energy Agency’s latest September reportIn the first half of 2024, global oil demand will increase by 800,000 barrels per day annually, with the growth rate slowing to the slowest growth rate since 2020.
The main reason for the economic downturn is “the rapid slowdown of China’s economy” and shrinking consumption July is the fourth month in a rowyear after year. China is the world’s largest oil importer as well as The second largest consumeraccounting for 15% of global oil consumption.
Lute demand and oversupply, U.S. crude oil prices fell to their lowest level in more than a year earlier this month. Iraq and Kazakhstan are key members of OPEC+ Production exceeds monthly quota According to the oil group’s agreement.
Alliance members have Recently postponed plans It plans to increase production by 180,000 barrels per day in October as part of a plan to return 2.2 million barrels per day to the market in the coming months.
Given this situation, falling oil prices became a theme at Asia’s largest oil conference. The question is not whether oil prices will fall, but primarily how much they will fall in the next few years.
Oil price $50
Daan Struyven, co-head of global commodities research at Goldman Sachs, estimates that crude oil prices could fall to as low as $60 a barrel within the next two years., If Chinese demand remains tepid. He did not rule out the possibility of a deeper decline.
“We estimate that Brent crude oil prices could fall to around $50 a barrel in the event of a mild U.S. recession… We are quite optimistic about the global economy,” Struvan said during the conference.
this american economy Resilient despite high rates aimed at curbing stickiness inflation Growth slowed and sparked fears of a recession. In other words, Americans Believe the U.S. is in recessionaccording to a survey.
When thinking about the supply and demand balance next year, it’s difficult to look beyond China.
lucky chef
Trafigura Global Oil Head
“Things are slowing down,” said Torbjörn Törnqvist, chief executive of commodities trading firm Gunvor. “I don’t think so, it doesn’t mean the economy is collapsing. Stagnation? Maybe, that’s bad enough for oil.”
Trading giant Trafigura has expressed concerns about weak demand from China and the associated global oil consumption.
“When you think about the supply and demand balance next year, it’s difficult to look beyond China,” Ben Luckock, Trafigura’s global head of oil, told CNBC on the sidelines of the meeting.
“I suspect we may be entering the 1960s soon,” he said. Global benchmark Brent crude oil Currently trading at $73.09 a barrel, the U.S. West Texas Intermediate Oil The price is US$70.57 per barrel.
Oil prices fell despite continued tensions in the Middle East and conflicts in Russia and Ukraine.
However, Lack cautions against being too pessimistic. “It’s dangerous because there are so many events that could ruin your day.”
“I’m not going to put all my chips on the table,” he added.
Can India step in?
China’s slowdown has prompted some to look for alternative oil demand drivers, with some looking to India as a potential candidate. India is the third largest oil consumer About 5 million barrels of oil are produced every day, accounting for 5% of world oil consumption.
According to IEA forecasts, India expected to lead oil demand growth in 2024surpassing China for the first time, with output expected to increase by 200,000 barrels per day.
India is the world’s fastest growing large economy and aims to surpass Japan and Germany to become the world’s third largest economy As soon as 2027.
Chen Hongbing, general manager of Chinese refiner Rongsheng Petrochemical, said he expected India’s production to grow further and the South Asian country’s consumption of gasoline and diesel to increase.
Things are slowing down. Doesn’t mean failure, I don’t think so. Stagnant? Maybe, it’s bad enough for oil.
Torbjorn Tornqvist
Chief Executive Officer, Gunvor Group
Other experts are more cautious.
“Remember, India’s demand accounts for one-third of China’s demand,” said Vandana Hari, founder and CEO of Vanda Insights. “So, will global oil demand grow in our lifetime or beyond? Another China? I don’t think so,” she said.
Fereidun Fesharaki, chairman of energy consultancy Facts Global Energy, said that in the long run, India’s growth rate will remain stable until the mid-2040s, but its scale and magnitude will not be the same as China’s.
