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DAVOS, Switzerland - Global energy trader Gunvor Group sees oil prices holding at current levels in the $70-$80 a barrel range on the back of a "marginal oversupply" and with no expected serious damage to production from Red Sea attacks, its CEO said.
"We believe the activity in the Red Sea will remain a serious nuisance for some time, but won't cause any serious damage or impact oil production," Gunvor's Torbjorn Tornqvist told Reuters on the sidelines of the World Economic Forum in Davos.
Tornqvist said he sees new non-OPEC production outstripping demand growth this year while the re-routing of shipments creates more stocks in transit.
"I see the range between $70 and $80 (a barrel). We may in the short-term test the lower end. In my view, because of constant productivity gains in upstream, $80 is a relatively high price," he said, adding that the Organization of Petroleum Exporting Countries (OPEC) would have to stay disciplined.
OPEC was however thrown in disarray in December after longtime key member Angola abruptly left the Saudi-led group.
Brent crude futures were up about 0.58% to trade at $78.60 a barrel on Tuesday at 1700 GMT.
While crude oil supplies risk tipping into a slight surplus, Tornqvist said refined product markets were "quite tight" owing to low stocks of gasoline, jet fuel and diesel.
"OPEC+ has to maintain discipline in order to defend the current price level," he said.
"As we all know, the state of the economy is not that certain."
Geneva-based Gunvor is one of the world's top independent oil and gas traders and made $1.1 billion in net profit in the first nine months of 2023. Its full 2023 results have not yet been released.
Tornqvist, the largest single shareholder with an over 80% stake, has for years floated the idea of finding a partner in the company or selling the firm in its entirety. Its most advanced discussions with the United Arab Emirates's ADNOC failed to move ahead last year.
Further, Gunvor must still resolve a potential major fine with the U.S. Department of Justice this year and has put aside $650 million.
"2023 was another good year for Gunvor, somewhere between 2021 and 2022. We keep most of our profits in the company, hence increasing our equity. My view on ownership hasn't changed. I am open minded," he said.
"If there is any combination that makes us a better company we will always look at it. Being independent is a good position."
(Reporting by Dmitry Zhdannikov, writing by Julia Payne, editing by Alexandra Hudson)