Vitol, the world’s biggest independent oil trader, expects the year to be challenging for oil markets as stocks of crude and products continue to weigh on the market, prompting it to manage the business conservatively in these uncertain time.

Despite these testing conditions, Vitol saw its total traded volumes of crude and oil products last year amount to 303 million metric tonnes (mt) – or an average of some 5.9 million barrels per day (bpd) – up 13 per cent from 2014 when it traded 268 million mt.

According to Platts, an oil and gas agency, the increase in trading was reflected in Vitol chartering 6,629 voyages last year compared to 6,053 the previous year.

Vitol President/Chief Executive Officer, Ian Taylor, however, said despite the favourable market structure for physical trading, “the absolute price levels and market volatility are causes for caution”.

“Revenues, which are dictated by absolute prices fell markedly despite an increase in oil and product trading activity,” he added.

Vitol saw its 2015 revenue slump by 38 per cent to $168 billion compared to $270 billion in 2014. “We expect this coming year to be challenging for the oil sector. Demand growth will be in line with long-term averages, but below the high levels seen in 2015.

“Stocks of crude and products continue to build and these will weigh upon the market. In this context, we shall focus on adding value to our customers and seek interesting opportunities, whilst remaining mindful of increased risks,” he added.

Source: The Nation