(Reuters) - International oil trader Vitol [VITOLV.UL] was hurt by a drop in profit last year due to tough market conditions prompted by the recovery in oil prices, the Financial Times reported on Sunday, citing people familiar with the results.
Vitol posted net income of $1.5 billion in the year ending December, down from more than $2 billion in 2016, one of its best years on record, the newspaper reported.
The privately held commodity trader found it difficult to make money from storing cheap barrels of crude and selling them later, the FT said.
The fall in full-year net income does not include gains from assets sales worth $300 million, the report said.
The Swiss-based company, which does not publicize its entire financial information, has earlier benefited from market volatility and opportunities to lock in profit in 2016 by storing oil and selling futures contracts for delivery at higher prices.
However, the FT said results have diminished due to a shift to “backwardation” - where price of a commodity for future delivery is lower than the spot price.
During 2016, Vitol consolidated and expanded its presence in the retail sector by increasing its stakes in existing ventures while also adding Royal Dutch Shell’s aviation business in Australia.
Vitol declined to comment on the FT report.
Reporting by Shalini Nagarajan in Bengaluru, editing by David Evans