Oil’s slump below US$60 a barrel during the worst of last week’s rout had priced in zero demand growth this year, and was probably an overreaction, according to the head of research at trader Gunvor Group.
Brent futures fell as low as $58.40 on Wednesday — almost $25 below their 2025 high — as the escalating trade war between the U.S. and China sapped confidence across global markets. The slide was compounded by a surprisingly large output increase by the Organization of the Petroleum Exporting Countries and its allies.
“I think the market overreacted,” Gunvor’s Frederic Lasserre said in an interview. “Not only on oil, but on equities people were pricing a global recession. I think this was a bit too aggressive, at least for now, and from here I see a bit more upside than downside because I feel there is a better exit than the zero-growth situation.”
U.S. President Donald Trump’s first round of reciprocal tariffs — prior to further escalation between the U.S. and China — would likely lead to demand loss of about 380,000 barrels a day, Lasserre said.
Still, if there were to be no demand growth this year, then nearby timespreads wouldn’t be trading in a bullish pattern and refining margins would have weakened further, he added. On Friday, the nearest U.S. crude futures contract fetched its biggest premium over the next month since early February.
Lasserre also said that if West Texas Intermediate stays near $60 a barrel, there’s unlikely to be any growth from U.S. shale fields next year. Supply would still expand in conventional U.S. fields, however.
Alex Longley, Bloomberg News
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