Tanks in Cushing, one of the biggest storage hubs in the world, are expected to fill to capacity as early as May, traders said, as the coronavirus pandemic destroys demand and Saudi Arabia and other nations ramp up supply.
Global oil demand could fall by as much as 10 to 12 million barrels per day in April, analysts said, more than 10% of daily demand.
U.S. West Texas Intermediate crude cash roll for April/May – the three-day period after the front-month futures contract expires and traders rebalance their positions, traded at minus $3 a barrel, the weakest since May 2010.
The roll trade is closely tied to supply and demand at Cushing, the delivery point for U.S. crude futures.
Inventories at the storage hub already rose about 870,000 barrels in the week to Friday, traders said, citing data from market intelligence firm Genscape.
Storage rates at Cushing have more than doubled over the past month as traders scramble to store crude in the hopes of selling it a future date for higher prices.