Towards tank tops

The one thing storage operators needn’t worry about for the rest of the year,  is whether or not their tanks will be filled THE OIL market is currently deep in uncharted territory having to deal simultaneously with a supply shock from the abrupt termination of the OPEC+ production cut agreement and a demand shock from the coronavirus (COVID-19) pandemic. The market has demonstrated before, that it can deal with either shock by itself. The great financial crisis of 2008/2009 was solved by a combination of stimulus spending and OPEC cuts, while the decision of OPEC to cut production in November 2014 stimulated demand strongly enough to tackle the oversupply. Each of these events was noteworthy enough to go into oil lore. With OPEC+ abandoning its long-term strategy of market management we are seeing the opposite of what would normally occur in a demand shock. Instead of quickly cutting supply in the face of massive demand losses stemming from COVID-19, Middle Eastern OPEC countries are priming their pumps to push even more oil onto the market in a bid to reclaim market share lost in previous years. If Saudi Arabia and others continuously play hard ball, we are looking at a...