Oil market to get even tighter on Russia disruptions: Vitol

Oil market to get even tighter on Russia disruptions: Vitol

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Bloomberg

Global oil markets could tighten even more with Russian flows being disrupted and producers such as Libya experiencing supply problems, according to Vitol Group, the world’s biggest independent crude trader.

That could push prices higher still after they soared to more than $115 a barrel in the wake of Russia’s invasion of Ukraine.

“We have plenty of twists and turns to come,” Mike Muller, Vitol’s head of Asia, said on a podcast produced by Dubai-based consultant and publisher Gulf Intelligence. “While I think the world is already pricing in the fact there’ll be an inability to take in a serious amount of Russian oil in the western hemisphere, I don’t think we’ve priced in everything yet.” His views echo those of several commodity hedge funds and Wall Street banks such as Goldman Sachs Group Inc, which says oil could reach $150 in the next three months.

The market could see “steeper backwardation,” Muller said, referring to a bullish pattern whereby near-term futures are more expensive than later ones because physical traders are rushing to secure supplies as soon as possible. The one-month time spread for Brent is already