The world’s largest independent oil trader says oil prices could jump this year to a record high above $150 a barrel because of growing tensions with Iran, the FT reports. Ian Taylor, chief executive of Vitol, said on Tuesday that the commodities trading house’s main scenario was for crude oil prices to remain at around current levels of $120 a barrel for the balance of 2012. But he warned: “Geopolitical risk, especially in the Middle East, creates potential material risk to the upside.” Mr Taylor said oil prices could even surpass the record high of nearly $150 a barrel set in mid-2008. “It is unlikely, but it is possible,” he said when asked whether prices would rise to a new record. The bullish outlook comes as oil executives, traders and policymakers warn about rising prices during International Petroleum Week, the annual gathering of the industry being held this week in London. Brent, the global oil benchmark, hit an eight-month high of $121.42 a barrel on Tuesday, up $1.37 on the day, as supply outages in South Sudan, Yemen, Syria and Libya, and the fear of a significant disruption in Iran, outweighed a slowdown in demand growth.
Muammer Gaddafi vowed to stage a “long fight” for control of Libya that would see it “engulfed in flames” as world leaders in Paris backed a new administration for the country, reports the FT. His message came as some 60 nations and international organisations gathered at a summit in Paris and recognised the right of the national transitional council, Libya’s interim rulers, to map out a constitution for the country in the aftermath of Col Gaddafi’s fall. It wasn’t all peace and love in Paris, however. Divisions have emerged over access to Libyan oil between countries that contributed to the war and those that did not, such as China and Russia, says the WSJ. The Telegraph alleges that oil trader turned junior minister Alan Duncan set up a “Libyan oil cell” inside the UK government to find ways of helping the Libyan rebels export oil. This paved the way for a deal between the rebels and commodities trading firm Vitol, a big donor to Alan Duncan’s private office in the past, according to the newspaper.
Reuters published a special report Monday on the Libyan rebels’ efforts to sell oil in spite of the ongoing civil war and high levels of legal uncertainty.
The last time we posted on the topic, the rebels had sold 1m barrels with the help of Qatar but were struggling with both the supply and demand for further sales. Read more
Vitol, the largest oil trader, has been fined $6m by the US federal commodities regulators for “wilfully” failing to disclose in 2007 information on the relationship of two subsidiaries to the New York Mercantile Exchange, the FT reports. The fine comes amid heightened regulatory scrutiny of the oil market in the US. Earlier this year, the Commodities Futures Trading Commission fined Moore Capital, the hedge fund, and Morgan Stanley with separate penalties totalling $39m for alleged breaches of rules in the precious metals and oil markets. The CFTC said on Tuesday that it had settled a case involving Vitol Inc and Vitol Capital Management Ltd, both based in Houston, Texas. The regulator said Nymex “misperceived” the relationship between the two companies and the companies did not correct the situation until much later.
The problems facing independent refiners refuse to go away, so it shouldn’t be a surprise that Europe’s largest independent refiner Petroplus last week agreed to sell its Antwerp refinery’s processing facilities in a bid to raise much needed cash.
This, of course, shows to what extent refiners are still being crushed by unfavourable product margins despite the recent rise in crude prices. Read more
Maybe it’s just a media thing, but we are interested to know how Swiss energy trader Vitol might respond to the CFTC and/or the Washington Post, now it has been named as a supposed speculator playing with the oil price.
Certain congressmen are likely to go through the roof when they return to work in Washington after Labor Day. Read more
Instead it’s the Geneva-based oil trading conglomerate Vitol – or so America’s Commodity Futures Trading Commission seems to be insinuating.
The Washington Post on Thursday named Vitol, which has offices in about 25 countries, as a key player in the oil market that had been “reclassified” by the CFTC as a financial – rather than industrial – operator. Read more