Oil prices will stay low for as long as 10 years as Chinese economic growth slows and the U.S. shale industry acts as a cap on any rally, according to the world’s largest independent oil-trading house.
"You have to believe that there is a possibility that you will not necessarily go back above $100, you know, ever," Ian Taylor, Chief Executive Officer of Vitol Group BV, told Bloomberg. His company is the world's largest independent oil trader. Instead of any significant increase or decrease, the exec believes crude could hit $45 to $50 a barrel in the latter half of 2016 and hover around $50 for the next decade. Prices would fluctuate about $10 in either direction over those years.
Inside the commodity trader Vitol pulls the levers of the global economy.
“It’s very difficult to say that it has bottomed out, for sure, we’re in the situation where we have too much supply... There’s a feeling in the financial community that perhaps we’re getting towards the bottom, but I wouldn’t say that we can say for sure that the price has bottomed out,” he said.
Vitol expects that Iran will produce up to 500,000 barrels a day in additional oil by the middle of the year and another 200,000 barrels a day by year-end. The Persian Gulf state, unencumbered since last month by sanctions on its crude exports, is adding to the "supply weight" in world markets, Taylor said.
