*

Trafigura sees risks of oil prices falling to around

$60/bbl,

Gunvor says $70/bbl is fair

*

Global oil oversupply to continue

*

China demand is soft, global commodity traders say

(Adds comments in paragraphs 16-20)

By Florence Tan, Chen Aizhu and Trixie Yap

SINGAPORE, Sept 9 (Reuters) - Global commodity traders

Gunvor and Trafigura anticipate oil prices may range between $60

and $70 per barrel due to sluggish demand from China and

persistent global oversupply, executives told a conference on

Monday.

Oil prices have been under pressure due to concerns about

waning demand in key economies China and the U.S. - despite

earlier expectations of summer demand being supportive - dipping

after touching over $90 a barrel earlier this year.

Market relief came after the Organization of the Petroleum

Exporting Countries and its allies, the group known as OPEC+,

agreed last week to delay a planned oil output increase for

October and November. However, commodity traders warn this

relief may be short-lived.

"The market got a little bit of sugar candy for two months,

but really very little," Ben Luckock, global head of oil at

Trafigura, told the Asia Pacific Petroleum Conference (APPEC),

adding that oil prices may fall 'into the $60s sometime

relatively soon.'

"The market wants to know ... that OPEC is not going to

bring those barrels back or at best is going to bring it back

much slower and on a deferred basis."

Oil's fair value is $70 per barrel as there is more oil

currently produced globally than consumed and the balance is set

only to worsen over the next few years, said Torbjorn Tornqvist,

co-founder and chairman of energy trader Gunvor.

"The problem is not in OPEC, because they've done a great

job to manage this," Tornqvist said. "But the problem is that

they don't control where the growth is right now outside OPEC,

and that's substantial."

Oil futures jumped by a dollar in early

Monday trade as a potential hurricane system approached the U.S.

Gulf Coast. Later, however, they handed back their gains.

OVERSUPPLY, SOFT CHINA DEMAND

The International Energy Agency (IEA) expects oil supply

growth this year to reach 770,000 barrels per day (bpd),

boosting total supply to a record 103 million bpd.

That growth is set to more than double next year to reach

1.8 million bpd, with the United States, Canada, Guyana and

Brazil leading gains.

"Growth is slowing in the U.S. but not coming to a halt and

still significant, which presents another challenge for OPEC+

decision-making," Jim Burkhard, vice president of research at

S&P Global Commodity Insights, told the conference.

Burkhard sees OPEC+ increasing oil supply next year for the

first time since 2022 and even if the group decides not to do

so, spare oil production capacity globally, including over 5

million bpd in the Middle East, is set to pressure prices.

"The cycle of oil supply surplus continues. It will come to

an end, but that will be in 2026 or beyond," he said.

Soft demand in China, the world's second-biggest economy, is

also worrying markets, Trafigura's Luckock said, adding that

some market players believe Beijing may have more economic

stimulus in reserve depending on the outcome of the U.S.

presidential elections in November.

"There are plenty of examples of what the Chinese central

government is doing to help the economy at the moment, but none

of it is this big bang headline that sometimes the market

wants," Luckock said.

RECORD SHORTS

However, oil is vulnerable to price spikes from geopolitical

events or supply disruption due to a record number of short

positions in the market, Luckock and Jeff Currie, chief strategy

officer of energy pathways at U.S. investment giant Carlyle

Group ( CG ), warned.

"The market has become incredibly relaxed about disruption,

because it'll argue that there's millions of barrels of spare

capacity. But it can change," Luckock told Reuters.

Currie told Reuters he saw an upside to prices as once the

U.S. Federal Reserve starts cutting interest rates, that will

reduce some of the pressure on capital-intensive sectors like

commodities.

"The upside is generated more from positioning than it is

from fundamentals with that record short in oil and gas, there's

a non-trivial possibility that it tries to exit," he said.

"And if it exits, and it's disorderly, then it could create

a lot of upside."