Goldman Sachs says global oil storage capacity to be reached in 3 weeks, then a 20% cut in production

GS commodity analysts

  • crude building in storage tanks at record levels
  • global storage capacity to be filled in 3 to 4 weeks
  • once filled, will be nowhere to put any further oil output
  • producers will be forced to shut enough supply to match the demand loss – a cut of around 18 to 20 million barrels a day by mid-May
  • likely to trigger further price volatility – price spikes to the downside until supply equals demand
GS add on the demand bottoming out, likely 4-8 weeks away.
Further ahead, the necessary oil production cuts cannot be quickly reversed, which could well put the global oil market into deficit by  global oil market could be in a deficit by June Рwith prices to begin then to slowly recover.