Weir, Trafigura CEO, sees a very tight oil market. "The market is very tight, too well worth a price," said Weir

Weir, Trafigura CEO, sees a very tight oil market. "The market is very tight, too well worth a price ...

- Oil prices have become very tight and a lot more sought after, with demand returning high, the executive officer on the global trading firm reported on Tuesday.

Jeremy Weir told the China summit, "We're seeing very tight oil, but it isn't artificially tight due to what OPEC is doing. It isn't artificially tight."

Global crude benchmark Brent is recovered 60 per cent since the start of the year, resuming the cost of a barrel at over 80 per cent, while the economy in the world rebounds from the pandemic.

The Organization of the Petroleum Exporting Countries and their allies continue to restrict production, a market structure called backwarding reflects tight demand for supply.

"There's certain OPEC members that probably can increase supply quickly," Weir said.

I think people should recognise it isn't a situation where you might just flick the switch and increase production. There's much investment, it's still time to do that, he said.

I think there's a bit of an issue, which has looming on oil price a long-term basis, I think $100+ on oil... (is) very possible."


Weir warned warned about the substantial deficit in some commodities such as cobalt, nickel and copper, the rise of global demand for electric vehicles and renewable energy.

"Some of these metals are simply not being available because of the increase in demand," he said.

"We've already seen an immediate increase in demand not only from China, but also from the United States and Europe. In addition to the massive growth of stock, we expect substantial deficits of some commodities.

A record on Oct. 18 is the lowest since 1998. A five-month contract for the London Metal Exchange and the Shanghai Futures Exchange has doubled over the last two months. In the long-term, LME cash exchange continues to a record-setting 1.8 percent of its worth.

That executive said that if we don't see a major meltdown in industrial production out of China, we're prone to a pretty dire scenario, the executive said.

Weir said cobalt, nickel supplies could also become problematic if companies cannot power to commission mines more efficiently without compromising safety standards.

He added that nickel, in some other locations, like Indonesia, has a very high carbon footprint compared to other industrial plants that produce sulfurous sulphides.

Founded in April, the company is investing in carbon capture and storage. Weir said the carbon trading could become Trafigura's third business pillar.

"What's interesting is that people shy away from decarbonisation, and I think this is a huge challenge, but a very attractive business opportunity," weir said.


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