Vitol and Oil Prices

Paul Hodges also blogged about Vitol CEO Ian Taylor’s comments on the recent rise in oil prices in his Chemicals and the Economy blog.

According to ICIS news, Taylor noted that inventories are well above 5-year highs, a "huge surplus" exists in terms of days of supply and OPEC cuts "are unlikely to rebalance the market any time this year."

“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." Taylor said.

Ian Taylor on U.S. Crude Prices

I came across this Reuters article by Jennifer Tan while reading about the Asia Oil & Gas Conference. Vitol and CEO Ian Taylor are mentioned a few times. Taylor has interesting insights on the recent jump in U.S. crude prices.

Oil execs eye crude rebound, weak distillates
By Jennifer Tan
June 8, 2009
Reuters

KUALA LUMPUR (Reuters) - Crude oil demand has begun to recover, as stockpiles are drawn down, but distillate inventories remain bloated, with traders banking on cheap freight to store excess supplies on vessels, top energy executives said on Monday. The International Energy Agency (IEA) expects OECD oil stocks to fall to 57 days by year-end from the current 63 days, if OPEC's production continues at current levels, along with the recovery in demand.

Analysts said the general rule has been that 50 days of forward cover is very bullish for oil prices, 53 days is bullish, 57 days bearish and 60 days very bearish. "This is probably a turning point (in the demand recovery) or we are very close to it," IEA's head Nobuo Tanaka told Reuters at a sidelines of the Asia Oil & Gas Conference.

Along with the rebound in demand, the contango for crude may have started to unwind, though demand for diesel is still weak, European trader Vitol said.

"We are seeing the contango narrowing on light sweet crude, not really on distillates yet. Not in the summer at least," Vitol CEO Ian Taylor told reporters on the sidelines of the conference, adding that Vitol is also storing distillates and crude on ships.

read more: http://www.reuters.com/article/businessNews/idUSTRE55809V20090610