The world’s biggest independent oil trader said crude could resume a slump that saw prices fall 61 percent between June and January, as unrelenting growth in U.S. output leads to a “dramatic” build in the nation’s stockpiles.
The oil market is slightly oversupplied, making another downward move possible in the first half before supply and demand balance in the last six months of the year, Ian Taylor, chief executive officer of Vitol Group, said Tuesday. There are no signs of slowing U.S. output even as the country’s drillers idle rigs, he said.
Brent crude, a global benchmark, has rallied 27 percent from its low point this year. It’s still down by half from last year’s peak as the U.S. pumps the most oil in three decades and OPEC responds by maintaining its own output to keep market share. While companies have pulled rigs off oil fields and cut billions of dollars of planned spending, it will be some time before there is an impact on production, according to the International Energy Agency.