With oil having crashed to 18 year lows, experts predict that oil could plunge to below $ 10 / barrel
The world is in a lock down, fewer cars are plying, planes are not flying, manufacturing has almost ground to a halt resulting is historically low demand. Supply, on the other hand, remains largely resilient amid a price war between Saudi Arabia and Russia. US producers don't want to be the first to blink by turning off production.
Market analysts say that eventually there could be no place for all the surplus oil to go.
Storage facilities, refineries, terminals, ships and pipelines eventually could reach capacity
Although headline oil prices such as West Texas Intermediate and Brent are trading north of $20 a barrel, few regional prices have gone below $10. This is especially true for landlocked grades of crude where access to storage is difficult.
In April, some 6 million barrels per day of crude may have nowhere to go. This could rise to 7 million barrels per day in May.
As per Bloomberg report, a Wyoming crude grade was recently bid at negative 19 cents a barrel.
Shrinking storage capacity means that oil producers in some cases have to pay someone just to take the barrels off their hands.
Eventually oil demand will come back. However if by that point oil wells have shut down then today's oil glut may suddenly turn into tomorrow's oil scarcity, pushing prices above $55 next year as per Glodman Sachs