A blend of low commodity prices, capital requirements and increased price transparency has eroded margins, reduced arbitrage opportunities and modified the players participating in this competitive arena.
Stringent regulatory measures have led to rising complexity costs and a tightening of the financing environment. In response to shifting dynamics, the leading trading houses are adapting their core business model, status-quo trading patterns and risk management measures.
This paper addresses the broad impact of low oil prices on global oil trading; in particular it highlights Six Core Trends shaping the oil trading sector in the last 12 months:
- Capturing the Value of Optionality – space, time and form
- Diversification: Capturing Value across the Supply Chain
- A Banking Retreat
- The Necessity of Risk Management
- Trading Plays: Strategic Moves in a Downturn
- China: Implications of a slowing economic powerhouse