(Bloomberg) -- Vitol Group, the world’s biggest independent oil trader, expects global crude demand to climb by an extra half a million barrels a day this winter as a gas-led energy crunch drives a rush for other fuels.

Oil is most likely headed above $80 a barrel, partly as higher gas prices boost demand, Vitol Chief Executive Officer Russell Hardy said in an interview from London on Thursday. That could force OPEC+ producers to add more supply into the market, he said.

“Can demand surprise us to the upside because of power switching? Yes,” Hardy said. “Is it likely that there’s half a million barrels a day of extra demand that comes through because of gas pricing? Probably our view is, that is likely across winter.”

Hardy’s bullish view echoes that of Goldman Sachs Group Inc., which is predicting higher crude prices, especially if the winter months are colder than normal. Traders have been assessing the likely impact of a tightening natural gas market on the broader energy complex over the coming winter.

European gas stockpiles will be at about 78% of normal levels during October, an indication of a tightening market in the colder months when demand surges, said Hardy.

“All people are worried about is that we’re missing pieces of stock which we normally have,” he said. “During the winter, demand for gas is massively higher than demand for gas during the summer. You have to store, there’s no two ways around it.”

Global Demand

The tightness in gas stockpiles coincides with strong global demand, with countries such as Pakistan, Bangladesh, India and China seeking to use cleaner fuels for their pipelines and power systems, Hardy said. 

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That means gas will remain pricey, prompting buyers to procure alternative fuels such as liquefied petroleum gas or naphtha for the power sector or industrial uses, according to Hardy. For example, gas is trading at about $1,200 a ton, whereas LPG is only about $750 a ton, he said.

While global oil demand is still about 4 million barrels a day below 2019 levels -- mainly due to lower jet-fuel consumption -- that gap will narrow steadily, the CEO said. Hardy expects demand to return to 2019 levels by the middle of next year, while peak demand will arrive closer to 2030.

The OPEC+ coalition is “micro-managing” the oil market, and will use its planned output increase to keep prices in check, he said.

“It is finally balanced for the next six months,” Hardy said. “We’re not worried about demand in the long run, we know it’s going to come back steadily.”

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