Head of News Asia, S&P Global Platts
Oil is witnessing an unprecedented, simultaneous demand and supply shock that has the potential to send prices further down, as the world runs out of space to store supplies coming to a market that has seen demand crash due to the COVID-19 pandemic.
The origin of the current carnage began with the collapse of the Organization of the Petroleum Exporting Countries (OPEC)+ coalition’s discussions on March 6, when Russia failed to agree to a Saudi call for a deeper oil production cut from the group.
The meeting ended with the Saudis completely backing out of production cuts and promising to flood the market with supply starting April 1. They followed that decision with an aggressive cut in the price of their crude to make it more attractive to buyers.
Oil prices fell over 20 percent in the immediate aftermath and have found little support since. Brent and NYMEX crude f...