Oil storage buckles as virus saps demand

Global oil storage capacity is under intense pressure because of booming output from Saudi Arabia and the United States while the coronavirus outbreak slams the world economy and crude demand.

"We knew that surging output from OPEC members would place upwards pressure on crude oil stockpiles," Petromatrix analyst Olivier Jakob told AFP. "Yet this phenomenon clearly accelerated... with the collapse of oil demand."

As a consequence, the market remains awash with crude in storage on land and in container ships. And the estimated level of total oil stockpiles has now overtaken the previous peak set in early 2017, according to data from energy sector intelligence firm Kpler, which warns stocks continue to swell.

Michael Tran, energy strategist at RBC Capital Markets, predicts the global surplus could now reach 10.6 million barrels of oil per day in the second quarter of the year.