Brent crude will trade in the range of $100 to $120 a barrel, according to David Fransen, chief executive officer of Vitol Group’s Geneva unit.
Prices are currently higher “due to the increased rhetoric surrounding Iran and Israel,” Fransen said today in presentation to the British-Swiss Chamber of Commerce in Geneva. “I’m not that bullish about economic growth in Europe.”
Brent for November settlement rose 18 cents to $113.97 a barrel as of 9:40 a.m. local time on the London-based ICE Futures Europe exchange. The contract lost 2.46 percent in the previous session. Crude in New York tumbled the most in two months yesterday, sliding more than $3 in less than a minute, as October options were about to expire. Fransen said he doesn’t know for certain what caused yesterday’s oil price drop.
The slump may have been a reaction to news that the European Central Bank won’t buy as many bonds as expected, leading to lower economic growth and lower demand for the commodity, he said. Sudden, unexpected movements can also be caused by algorithmic trading or incorrectly-entered orders, according to Fransen.
Vitol Group is one of the world’s biggest independent oil traders, handling about six million barrels a day.
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