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 – with prices to begin then to slowly recover.