The price of us oil has fallen by 55% due to the lack of containers for storage
Lack of storage space for oil continues to put pressure on the quotes and demonstrates that the production cuts will be quite slow, and therefore does not allow to compensate for the collapse in oil prices.
According to Bloomberg, off the coast of California has a backlog of about 30 oil tankers with a volume of almost 20 million barrels, which before the crisis would be enough to meet 20% of daily global demand.
currently, the tankers used to store oil, since terrestrial capacity is already full. As of April 17, the oil reserves in the US was 518,6 million barrels that almost reaches record levels in 2017 535 million barrels.
June futures on WTI on the London stock exchange fell 56% to 10.9 $/barrel, and Brent crude by 13% to 18.9 $/barrel.
pandemic Covid -19 a sharp reduction in oil demand has led to oversupply, so the physical storage reserves are exhausted around the world, resulting in the June quotes may fall again to negative values.
the Gradual abolition of quarantines and the economic recovery will not begin until June or July, so the oil market will continue to be crowded. Experts believe that the partial lifting of the quarantines will not lead to a sharp increase in demand for oil, because some people will work remotely and to travel while tourists will not risk. Most of the people staying at home, so the demand for automobile fuel, which is the main component of the world demand for oil, and in the future will be low.
the Fall in oil prices is due to the active production capacity against the background of sharp reduction of demand, starting in 2014, when automakers started to switch to alternative energy sources. If in the 1970-ies the oil provided 50% of the global demand for energy, now this figure dropped to 30%. So every new electric car becomes the nail in the coffin of the oil era. Recall that the former energy Minister of Saudi Arabia Ahmed Zaki Yamani is quite long warned that "the stone age did not end for lack of stones, so the oil era will end long before the world's oil reserves run out".
