Trafigura Sees Oil Slide Near $50 Prompting Deeper OPEC Cuts - Bloomberg

Trafigura Sees Oil Slide Near $50 Prompting Deeper OPEC Cuts - Bloomberg:

Brent crude could slump toward a level it hasn’t seen since December 2018 prompting deeper output cuts from OPEC and its allies, according to one of world’s biggest oil traders.

Macroeconomic headwinds and rising supply will chart a course toward $50 a barrel for the global benchmark over the next six months, which is about 20% lower than where it’s currently, Ben Luckock, Trafigura Beheer BV’s co-head of global oil trading, said during an interview in Singapore. It’s likely to return to a range of $70 to $75 in the medium to long-term, a level cheap enough for consumers but valuable enough to make producers money, he said.

But for the next six months at least, prices are likely to drift lower before spurring OPEC+ to cut further and U.S. shale drillers to reduce spending, slowing down one of the fastest-growing sources of output, he said. Brent crude added 0.8% to $62.90 a barrel as of 12:34 p.m. Singapore time. It has averaged about $65 this year, and was last below $51 in late December.