GENEVA, Oct 17 (Reuters) - Trafigura executives expect more upward pressure on global oil prices next year as rising U.S. shale output will not be able to fill a gap in supply once U.S. sanctions on Iranian oil come into force in early November.
The commodity trader's chief economist Saad Rahim, speaking at the Argus Global Crude Conference in Geneva, forecast 2018 crude oil demand growth at around 1.6 to 1.7 million barrels per day.
Rahim said this growth was not only coming from China and India but also from the United States and surprisingly, Europe.
Brent oil futures hit a four-year high at $86.74 a barrel on Oct. 3 though have since fallen and were at $80.89 a barrel at 1257 GMT on Wednesday.
Other major trading firms have a more bearish view on the price outlook, with Vitol and Gunvor seeing Brent next year at around $65 a barrel and $70-75 a barrel, respectively.
Looking ahead to next year, Trafigura's co-head of oil trading Ben Luckock said it was difficult to see enough spare capacity to compensate for output declines and drops in demand for Venezuelan oil and soon also Iranian.
He said that output was also falling in second-tier producers like China and Ecuador.
"There's OPEC production rise, the trade war and macro clouds but we think that some of these upside risks are being underplayed. Risk is more to the upside," Luckock said, adding that the output levels in Libya and Nigeria, which has elections next year, were also uncertainties.
"Under-investment is taking its toll in countries that we don't talk about every day. We see $1 trillion of under-investment globally, particularly in deep and ultra-deep. These are long lead time projects that you can't replace quickly."
As output falls, Luckock said there would be an unusual spike in crude demand from refiners next year as new plants come onstream.
"About 1.5 million bpd over the next 12 months. There are a couple of big ones (plants) in China, Malaysia, Turkey, Saudi Arabia, which is new demand," he said.
Trafigura does not consider rising shale production in the U.S. Permian basin as a near-term solution due to a lack of new pipelines taking the oil to export terminals
"Permian is not the perfect (solution) for lost production elsewhere (Iran/Venezuela etc). We know these pipelines are coming, we spend a lot time figuring out when but that is incredibly hard to predict which creates uncertainty," he said. (Reporting By Julia Payne. Editing by Jane Merriman)