“We expect this coming year to be challenging for the oil sector,” commented President and CEO Ian Taylor, with demand growth below 2015 levels building crude and products stocks weighing on the market.

“Whilst the market structure favours a physical trader, the absolute price levels and market volatility are causes for caution,” he added.

In 2015, Vitol’s revenues slipped 38% from 2014 to $168 billion despite a 13% expansion in total volumes of crude and oil products traded to 303 million tons. Contracted sales volumes in natural gas, power and coal also fell markedly.

Vitol’s downstream assets, particularly refineries, were said to have performed well through 2015. However, their portfolio was anticipated to hit a slowdown in demand growth rates in some energy markets this year.

Taylor outlined that the trading company was increasingly vigilant of counterparty risk as low energy prices would inevitably “test some market participants,” and plans to continue managing the business conservatively.

OPIS reported that some U.S. firms last year sought letters of credit with trading houses Noble and Glencore, or refrained from trading with them, following rating downgrades and giant lawsuits (see OPIS alert, Jan. 7, 2016).

Meanwhile, Vitol upped its footprint in the storage terminals business last year after acquiring the outstanding 50% shareholding in terminal infrastructure group VTTI, which has evolved into a market leader with a gross storage capacity of 8.7 million cbm.

In other long-term projects, the Ghana gas-to-power project, which Vitol has partnered with Italy’s ENI and Ghana National Petroleum Company (GNPC) to address the country’s thermal generation needs for the next 20 years, was said to be progressing well following the World Bank approval last July of a record investment in the project.

The trading firm’s global energy assets include 17.9 million cbm of storage, 390,000 b/d of refining capacity and Shell-branded downstream business in 16 African countries and Australia.