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LAUSANNE, Switzerland, March 21 (Reuters) – Executives from the world’s largest trading houses and mining companies are among those discussing market trends at the FT Commodities Global Summit in Lausanne, Switzerland, this week.
PIERRE ANDURAND, HEAD OF ANDURAND CAPITAL
“Taking a back of the envelope calculation, the big change over the next decade is EVs (electric vehicles) and it takes 10 years to make a new fleet of cars. You lose 5% of gasoline demand a year, you will lose eventually 1.2 million bpd (barrels of oil per day) every year.
“Even when we peak, oil demand won’t fall down so fast. We will reach peak demand towards 110 million barrels per day and then there will be slow decline from there.”
HELIMA CROFT, HEAD OF GLOBAL COMMODITIES, RBC CAPITAL MARKETS
“The question for the back of the year, if you can’t do another blockbuster U.S. SPR (Strategic Petroleum Reserve) oil release then you rely on the Saudis … they may send your call to voicemail.”
STEPHANE DEGENNE, CO-HEAD OF TRADING, GUNVOR GROUP
“People got scared on the oil situation, especially with gasoil. Russian gasoil is now leaving Europe to go to the Middle East and Asia. It needs to be replaced, creating a lot of logistical bottlenecks.
“With all these new refineries coming on stream, we are not very bullish refined oil products down the road.”
“For the time being, we are in a bit of a standback. We are very little involved in the Russian business. The world doesn’t need us. The oil is flowing.
“It’s a moving target at the moment. Sanctions can change very quickly. We are staying prudent.”
BEN LUCKOCK, CO-HEAD OF OIL TRADING, TRAFIGURA
Luckock sees severe under-investment in new oil production, and demand is still growing.
“No one is doing 15-year deep water fields off Angola anymore … I think we are in for a period of volatility in oil prices that will be higher than here. The oil price will be in the $80s a barrel by late summer.”
“The unintended consequence of the policy. You spend decades building an incredibly efficient logistics chain out of Russia … and you had people who’d done it for a long time. You have twofold impact, big companies removed themselves and more skilled ship owners and then the buyers changed.
“The danger is that you have people who are less experienced and certainly less transparent running the market and that’s a big step back.
“The banks aren’t funding this. We have 140 banks in our business and we are pretty sure they are not funding the companies who have sprouted up in Dubai, so it’s on credit. So if they have to wait 60 to 120 days for the oil to complete its cycle to get paid then so be it.”
(Reporting by Julia Payne; Editing by Jan Harvey and Mark Potter)