Despite the 9.7 million barrels-per-day (mb/d) cut agreed to by the members of OPEC+, as rumored last week and finalized on Monday of this week, crude oil continues its relentless slide due to the decline in demand. As of today, crude is down 36% from its highs just 6 trading days ago (Thursday Apr 9) and down 70% for the year, now at a level not seen since November of 2001.

This week, two international oil organizations, IEA and OPEC, predicted that 2020 demand will fall to levels not seen in 25+ years. On the supply side, the 9.7mb/d cut is big, but estimates of the supply glut are in the 20-30 mb/d range, which means there’s more work to be done. There is particular concern about the near-term supply issue, including a record 19.25 million build in U.S. inventories in one week according to the Department of Energy and the IEA warnings that we could soon exceed global supply capacity. You have to put the oil somewhere, and if the shutdown continues and production doesn’t fall further, we could quickly run out of storage, pressuring prices further.