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The IHS Markit consulting company notes that the current rate of supply and demand means that reserves will increase by 1.8 billion barrels after the first half of 2020. Given that only about 1.6 billion barrels of storage capacity are still available, producers will be forced to cut production because there will be no place to store oil by June.
The oil market suffered from a drop in demand as a result of the outbreak of coronavirus, and Saudi Arabia decided to increase production and give big discounts on oil after the collapse of the OPEC + coalition. On March 26, Pakistan banned the import of oil and fuel because its storage facilities were full. Vitol Group and Gunvor Group, two of the world's leading traders, say there is a lot of interest in storages, while several traders have ordered supertankers to store oil at sea.
The offer may exceed demand by 12.4 million barrels per day in the second quarter, while other traders, banks and consultants also predict a significant excess, according to IHS. On Wednesday, Vitol said that demand fell by 20 million barrels per day compared to the last year.
“Production will need to be reduced or even stopped. Now the only question is where and by how much,” said Jim Burkhard, head of the IHS oil market division.
source: bloomberg.com
The oil market suffered from a drop in demand as a result of the outbreak of coronavirus, and Saudi Arabia decided to increase production and give big discounts on oil after the collapse of the OPEC + coalition. On March 26, Pakistan banned the import of oil and fuel because its storage facilities were full. Vitol Group and Gunvor Group, two of the world's leading traders, say there is a lot of interest in storages, while several traders have ordered supertankers to store oil at sea.
The offer may exceed demand by 12.4 million barrels per day in the second quarter, while other traders, banks and consultants also predict a significant excess, according to IHS. On Wednesday, Vitol said that demand fell by 20 million barrels per day compared to the last year.
“Production will need to be reduced or even stopped. Now the only question is where and by how much,” said Jim Burkhard, head of the IHS oil market division.
source: bloomberg.com