Volatile Markets Expected to Boost Oil Trading Profits in 2020
While oil companies and their shareholders had a rough time weathering volatile oil prices during 2019, international oil traders including Vitol, Trafigura, Mercuria, Gunvor and Glencore are reported to have made record trading profits during the year. The in-house trading units of oil producing majors such as Shell, BP and TOTAL are also reported to have had a bumper year. With 2020 already having witnessed major disruptions to oil supplies on account of geopolitical tensions in the Middle East and supply outages in key OPEC producers Libya and Iraq, traders are expected to continue to profit from the persistently high volatility in oil markets. Growing fears of an economic slowdown triggered by the spreading of the deadly Coronavirus is already dampening global demand for oil, putting severe downward pressure on prices through the second half of January. New regulations introduced by International Maritime Organisation (IMO) aimed at cutting sulphur oxide emissions from ships also came in to effect on January 1st, resulting further fluctuations in the price of bunker fuel. As a number of major traders have also recently expanded operations to include trading in natural gas, LNG and other energy products, profits could rise even further in 2020 from these additional revenue streams.