Vitol, The Independent Mammoth Oil Trader, Follows BP’s Crude Outlook

  • Mar 20, 2019 AEDT
  • Team Kalkine
Vitol, The Independent Mammoth Oil Trader, Follows BP’s Crude Outlook

The Crude oil prices are surging, and the benchmark Brent (XBR) soared from its December 2018 (26th Dec’18, to be precise) low of $50.41 per barrel to the current level of $68 a barrel. The surge in crude prices is expected by the market participants to be event-driven rather than demand driven.

The OPEC voluntary production cut and the U.S. sanctions on Venezuela and Iran supported crude prices, and the prices of the commodity propelled from $50.41 to $68 a barrel. On the demand front the U.S-China trade war which showed some respite signs recently, has exerted tremendous pressure on the global economy and in turn, exerted pressure on crude oil demand.

Despite less demand in the global economy, the supply constraints provided a cushion to the oil prices and prevented any steep fall in it. However, in the recent status quo, the U.S-China trade war is seeing a U-turn from where it initially headed, and both the major economies are showing a disposition to end the long-standing trade dispute.

The willingness of both counterparts to end the trade disagreement provided an impetus to the investors of big oil giants to reckon the oil future, which in turn prompted oil giants to share their outlook on crude oil and take care of the investors’ concerns about the future of these oil companies.

The first one such company which shared its outlook with the oil investors and stakeholders of the company was the behemoth BP. The company in its report to the stakeholders mentioned that crude oil would continue to catch the significant share of the global energy demand.

Following the footsteps of the behemoth BP, another mammoth “Vitol”, the world’s biggest independent energy trader said that the oil demand is likely to peak within the next 15 years. The company forecasted the oil demand to peek earlier than estimated by BP.

The Chief Executive Officer of the company Russell Hardy said that the demand for oil is likely to increase in the next 15 years despite the increase in sales of electric vehicles, but it will fall after that.

The company is among the first from a trading house that has built its multibillion-dollar valuation over the expeditious pace of oil demand in the global economy over the past two decades. The company, which announced its trading volume of 7.4 million barrel a day of crude and refined products, jolted many industry participants as it managed to trade such high volumes of crude and related product despite the high volatility in the oil market in 2018.

The comments and outlook of crude oil from such a company are tracked closely in the industry. However, to build the portfolio to prevent any downturn in the company’s momentum after 15 years when crude demands either go steady or fall, the company is tapping into the renewable energy market as well.

All-in-all, both oil giants’ expectation perhaps seem to be somewhat similar and they both expect prices to reach a maximum level in coming 15-20 years before renewable energy catches the significant tranche of the global energy demand along with natural gas.


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