Oil trading group Vitol predicts strong demand for crude oil during 2018, enabling a further drawdown in global inventories as the year progresses.
Vitol claims both solid demand and OPEC production cuts had already combined to significantly lower inventories with signs that the trend should continue.
Speaking at the International Petroleum Week conference on Thursday, Vitol executive committee member Chris Bake said half a billion barrels of oil had been drawn down in “a short period of time.”
While expressing confidence over the prospect of further drawdowns during 2018, Bake claimed the outlook for 2019 was less clear.
Bake also said a major question facing the oil storage sector was how it would cope with new International Maritime Organisation rules for cleaner shipping.
“It’s going to be more and more difficult to burn that fuel oil with more economies going to natural gas for power,” added Bake.
After rallying to the $70 per barrel mark in January, oil prices have eased somewhat over recent weeks.
On Thursday, Brent crude oil futures were trading at just over $65 per barrel, virtually unchanged on the trading session as at 1200 GMT.
Rising output from US producers has raises fears that falling global inventories will not necessarily translate into gains in crude prices.