Vitol's Ian Taylor says we've seen the low for oil
Vitol is the largest independent oil trading firm in the world and it's chief executive, Ian Taylor says that we've seen the bottom in prices and that trading opportunities that have arisen from the price falls are waning
Speaking to the FT, he cites the slower return of Iranian oil to market and growing demand as reasons why the price crash is probably over
"Yes we have seen a bottom. Especially if the barrels from Iran have been delayed until later this year. The major moves we saw at the start of the year have been mitigated"
One of the reasons for the lack of further trading opportunities is that the futures spreads have narrowed, lowering the profitability of oil holders who are playing the contango
Taylor's firm posted $1.35bn profits to the 12 months to December, which was the highest from a private firm since 2011. Most of that was made in Q4
Technically, Brent crude has managed to break resistance around 62.50 and as it hold the level as support, as I type, stands a chance of pushing higher.
Brent crude daily
Another big drop down to around 55.60/80 would be enticing for a smallish long and 52.50 looks choice for a proper two footed jump in
Fundamentally the Iran news is likely to be more or less fully priced in which will limit the downside too. If an agreement doesn't come then up we'll go. As for supply and demand, we're likely to see a more balanced move in prices as the market judges the global growth potential