Vitol are one of the world's largest oil traders. Thus the blog was interested to see their CEO, Ian Taylor, suggesting that the recent rise in oil prices "does not sit comfortably with the currently available supply and demand data". According to ICIS news, Taylor went on to note:
• Oil demand fell 3m bbl/day in Q1 versus 2008
• Inventories are well above 5-year highs
• A "huge surplus" exists in terms of days of supply
• OPEC cuts "are unlikely to rebalance the market any time this year"
Yet last night, oil moved above $71/bbl, confirming the blog's own warning last month (when prices were at $60/bbl) that $80/bbl was possible by the summer. According to Taylor, financial player involvement is now back to last July's levels, when crude peaked at $147/bbl.
Chemical companies should be on the alert for a sudden change in sentiment, once the current rally runs its course. As Taylor noted, "in the short term, supply and demand fundamentals seem to be almost irrelevant to the flat price of oil, but as was seen in the second half of last year, they will always assert themselves over time."
Comments (1)
I've been waiting to see oil prices fall for the past six months. That's just not happened. When the paradigm shifts, I think that it is likely to be with a bit of a bump for the unprepared. I guess we could see domestic energy prices falling next winter.
Posted by Biofuelsimon | June 11, 2009 4:30 PM
Posted on June 11, 2009 16:30