Analysts at Goldman Sachs, in their latest client note, expressed their outlook on the global oil storage capacity and its implications on oil prices going forward.
Key quotes
“Crude building in storage tanks at record levels.
Global storage capacity to be filled in 3 to 4 weeks.
Once filled, will be nowhere to put any further oil output.
Producers will be forced to shut enough supply to match the demand loss – a cut of around 18 to 20 million barrels a day by mid-May.
Likely to trigger further price volatility – price spikes to the downside until supply equals demand.
Add on the demand bottoming out, likely 4-8 weeks away.”
- WTI oil price drops 5% in Asia as oversupply concerns persist
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