Commodities Players Predict Strong Year for Oil Traders

by Ship & Bunker News Team
Wednesday March 4, 2015

Commodities industry players Tuesday said 2015 could be a strong year for oil trading, as price volatility offers opportunities, Bloomberg reports.

"It is looking very well structured for oil trading," said Glencore CEO Ivan Glasenberg.

"If it continues like this, oil could have a blowout year."

Last month, volatility in Brent crude prices is said to have risen to its highest level since 2009.

"Volatility is likely to remain in the market throughout 2015, before oil recovers and the market finds an equilibrium," said Fitch analyst Dmitry Marinchenko, who predicts earnings growth for oil traders in the second half of 2014 as well as this year.

According to the report, oil prices slumped 61 percent from June 2014 to January on fears of a global oil glut.

Prices recovered slightly in February, although commentators have pointed out that oversupply still exists and the market may fall again.

While volatility still exists, traders said the "super contango" which existed in the market is no longer there.

Earlier this year, the gap between current oil prices and higher prices for future delivery was large enough that traders were reportedly booking tankers to use as floating storage.

"That window is now shut," said Vitol CEO Ian Taylor.

Glencore's head of oil, Alex Beard, said "when you see current spread conditions, they are attractive," but they are not enough to warrant the high cost of using tankers as storage.

"The super contango and the super profit in the crude oil market is just not there at the moment."