After a brief rally following OPEC’s production cuts, crude has reportedly fallen back to an 18-year low in New York “and everyone from the leaders of petro-states to the bosses of major oil companies is facing more financial pain from the coronavirus pandemic”, according to Bloomberg.

Oil demand is heading for the biggest annual collapse in history, with global consumption slashed by as much as a third this month by lockdowns aimed at containing the coronavirus.

IEA Executive Director Fatih Birol said: “In a few years’ time, when we look back at 2020, we may well see that it was the worst year in the history of global oil markets.”

The deal between the Organization of Petroleum Exporting Countries and its allies is helping the market, but the demand loss is so big that there is “no feasible agreement that could cut supply by enough” to offset it, the IEA said in its monthly report.

It said the largest hit will come this month, when fuel use will tumble by 29 million barrels a day to its lowest since 1995. 

Measures to contain the virus outbreak have effectively frozen the global economy: planes have been grounded, businesses shuttered and billions of people largely confined to their homes. The need for oil products such as gasoline and jet fuel has evaporated.

“Never before has the oil industry come this close” to being totally swamped, the IEA said.

US crude inventories expanded by 19 million barrels last week, which is the most on record. It is estimated another two weeks of builds at that rate would take stockpiles above the high of 1.37 billion barrels reached in 2016.

Even that would only lessen some of the suffering. This month may be one day be know as “black April,” and prices will come under further downward pressure in the coming days and weeks, added Birol.

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17th April 2020