(Adds dropped word 'oil' to headline)
By Jeslyn Lerh and Muyu Xu
SINGAPORE, Sept 4 (Reuters) - The oil market is vulnerable to price spikes due to low inventories and underinvestment in new oilfields, a senior official at global commodities trading firm Trafigura said on Monday.
While the market sees the fair price for oil at $72 to $88 per barrel, "the markets are probably a bit too relaxed," Ben Luckock, co-head of oil trading at Trafigura, told the APPEC conference in Singapore.
Brent crude was trading above $88 in Asia trade on Monday.
"I think the market is vulnerable to price spikes because of the long-term underinvestment in new oilfields. Higher interest rates, which make it more expensive to hold oil in storage, are another factor," he told Reuters on the sidelines of the event.
“For me the price of oil is probably somewhere in the $80s but the risks are to the upside," he said.
The U.S. economy, Luckock said, is "doing incredibly well" and has been resilient through rising interest rates.
"I suspect there's a little bit more to come," he said, referring to interest rate increases from the U.S. Federal Reserve to fight inflation.
Saudi Arabia is widely expected to roll over a voluntary oil cut of 1 million barrels per day for a fourth consecutive month into October.
“I suspect they will taper their supply cuts into year end, but I don’t think it'll be a big move," Luckock said.
The gasoil market is "very strong," he said.
"And we're not even in the maintenance period for refineries where it's meant to be strong," he said. "A lot of eyes are on distillates at the moment."
Luckock added that Russia has a different set of challenges "evacuating their crude products out of the country", which could prolong tighter supplies.
Last Thursday, Russia said it had agreed with OPEC+ - a group of the Organization of Petroleum Exporting Countries and its allies - to reduce oil exports and that it will announce details this week.
"We wait with bated breath to see what they are going to do," Luckock said.
"I guess the issue a little bit with the Russians has always been the credibility of the cuts," he said.
"Do people believe when they say they're going to cut 500 whatever it happens to be, and because it's actually quite difficult to track as well."
(Reporting by Florence Tan, Jeslyn Lerh and Trixie Yap; Editing by Jamie Freed, Tom Hogue and Deepa Babington)