Global oil refining margins are heading for a crash as supplies of products outstrip demand, the head of trading house Gunvor said.

Refiners around the world have enjoyed a rarely-seen run of strong profit margins over the past year as the halving of crude oil prices to $50 a barrel sparked demand for products such as gasoline, diesel and jet fuel.

Gunvor Chief Executive Officer Torbjörn Törnqvist told the Reuters Commodities Summit he expects global demand growth to drop to around 1 million barrels per day (bpd) next year from around 1.7 million bpd in 2015.

The slowdown in global consumption coupled with a rapid increase in new refining capacity in the coming months, geared mostly towards diesel production, is exerting growing pressure on refining profits.

"I see surpluses everywhere, practically for every product," he said. The surplus of diesel marks a structural shift that could linger for years to come, he said.

"It is just a shift of oil from crude oil to products and we are in the middle of that and I suspect that will lower and look heavy on oversupply."

European refining margins are set to average around $6 a barrel in 2015, according to consultancy Wood Mackenzie, the strongest since their records started in 1995.

Törnqvist said not all refineries would be damaged by the downturn, and that the company had taken steps to insulate its assets.

Gunvor has announced it is acquiring Kuwait Petroleum International's Rotterdam refinery, adding to its Antwerp and Inglostadt units, increasing its refining capacity to nearly 300,000 barrels per day.

But as refineries continue to operate at high levels to lock in still relatively strong margins, product is accumulating in storage tanks.

"Refining margins are not bad enough to stop refining. The distillates coming are finding a home in storage but that can not go on forever so, something has to give," he said. "Refining margins will have a pretty hard downturn very soon."

Törnqvist said the overall surplus would forestall a sustained crude oil price rise at least until the middle of next year. The oversupply in oil products itself, he said, is likely to extend into 2017 due to a relatively light refining maintenance schedule.

"That's why I'm not very optimistic over refining margins."