Dutch oil trader Vitol sees long-term impact from renewables
With OPEC voluntarily sidelining oil from the market, the company said last year was “challenging.”
After coming off a “challenging year,” Dutch oil trader Vitol said Monday it expected the renewable power sector to have the biggest long-term impact.
The crude oil and petroleum product trading segment is the largest for Vitol, which said Monday its total sales — not counting liquid gases — declined about a half percent from 2016 levels, even though demand in 2017 was steady.
“2017 was a challenging year, notwithstanding robust demand growth of 1.6 million barrels a day,” Chairman Ian Taylor said in a statement. “Across the year, the pattern of demand and supply surprised the market, causing prices to dip in the first half 2017, before rallying in the latter part of the year.”
Crude oil prices were supported in part by a decision from the Organization of Petroleum Exporting Countries to drain the surplus from the five-year average in global crude oil stockpiles through coordinated production cuts, voluntarily sidelining about 2 percent of total demand.
The International Energy Agency reported Thursday that global energy demand growth increased last year by 2.1 percent from 2016. With the global economy accelerating, that was more than twice as high as the rate from 2016-17.
Crude oil is the largest segment of Vitol’s business and its volumes increased only modestly from 2016. The IEA found that renewable forms of fuel met about 25 percent of global energy demand growth. For electricity-generation, renewables increased 6.3 percent from 2016, the fastest rate for any type of fuel.
“In the longer term, we anticipate that renewables will have a growing impact on energy markets, most notably the power sector,” Taylor said.
The Organization for Economic Cooperation and Development anticipates the global economy will grow by 3.9 percent in both 2018 and 2019. That’s an improvement from the 3.7 percent growth in gross domestic product reported last year.
The two largest economies in the world — the United State and China, respectively — are expected to slow down starting in 2019.
Source: UPI
