"The mist is becoming a little clearer. It's a bit easier to see the future, so the market is more able to make an educated guess about what that supply/demand balance looks like. We haven't had a monster rally. It's just a statement that the worst is over."
On Tuesday, Brent oil futures were around $29 a barrel , up from around $20 at the beginning of last week.
More than 4 billion people are under some form of lockdown to prevent the spread of the coronavirus. However, over the last week, some U.S. states, India and several major European countries have begun easing restrictions.
He also seems permanent demand erosion to be likely as humanity gets used to a different behaviour patterns.
"Some commentators are saying; isn't it nice that we can cycle up and down our roads, isn't it nice that there's no NOx (nitrogen oxides) ... there are some elements that have been good for health – perhaps not mental health – but physical health," Hardy said.
"Taking that all into account, do we go back to living as we did before Therefore, has the trajectory for oil demand changed If we're all expecting a peak in 2030, 10 million bpd up from here, is that 10 now 5 million bpd"
Various oil majors such as BP and Shell have predicted peak demand from around 2030 to 2040.
Jet fuel demand alone will account for a large chunk of demand loss due to the pandemic, slated to be down 2-3 million bpd by year end from its pre-crisis level of 7.5 million bpd, he said, adding that airlines will use this time to retire old fuel-guzzling planes. Currently, Vitol pegs jet demand at 1 million bpd.
"The OPEC meeting delivered what they could under the circumstances. Initially, the market was suspicious about compliance but now their programmes look a lot more like the deal ... That negative sentiment on the supply side has been slightly abated," he said.
To counter the crash in demand, the Organization of Petroleum Exporting Countries and other producing countries hammered out a major production cut deal in which OPEC cuts would be 9.7 million bpd for May and June.
North America alone will have cut over 3 million bpd of crude oil and natural gas liquids between March through to the end of May, he said.
Vitol expects stocks to continue building into early June, reaching a total build of 1.3 to 1.5 billion barrels since Jan. 1, before ships start de-stocking in July.
Looking further ahead, Hardy said cuts to capital and operational expenditure by oil majors will help boost the recovery for several years as supply will tighten.
"Those cuts in turn help some kind of recovery in years to come because mega projects don't get sanctioned and won't come onstream in 2022/23 but in 2024/25," he said.
(Reporting by Julia Payne and Dmitry Zhdannikov; editing by David Evans) ((firstname.lastname@example.org; +44 207 542 1836;))