Well now...didn't see that commin'........
Oil prices could soon turn negative as the world runs out of places to store crude, analysts warn
The coronavirus pandemic has meant countries have effectively had to shut down, with many governments imposing draconian measures on the daily lives of billions of people.
It has created an unprecedented demand shock in energy markets, with storage space – both onshore and offshore – quickly running out.
Global oil storage could reach maximum capacity within weeks, energy analysts have told CNBC, as the coronavirus crisis dramatically reduces consumption and some of the world’s most powerful crude producers start to ramp up their output.
The U.S. investment bank estimates that the world has around 1 billion barrels of spare storage capacity, but much of that will never be accessed “as the velocity of the current shock will breach transportations networks.”
“Indeed, given the cost of shutting down a well, a producer would be willing to pay someone to dispose of a barrel, implying negative pricing in landlocked areas,” analysts at Goldman said in a research note published Monday.
“Already, ports and refiners are turning away oil tankers. This will put even more downward pressure on prices and pose an existential threat to many companies,” Eurasia Group said.
https://www.cnbc.com/2020/04/01/cor...-turn-negative-as-storage-nears-capacity.html