Morgan Stanley's Global Oil Strategist Martjin Rats while talking to Bloomberg said oil prices need to drop below $10 to rebalance the market.
The back gold tanked over 65 percent in the first quarter as the coronavirus outbreak brought the global economy to a standstill, leading to demand destruction. Meanwhile, the Saudi-Russia price war further added to bearish pressure around oil.
Whether you model 15 million barrels of demand destruction or 20 or 25, at some point, that doesn't quite matter so much anymore. We end up with a forecast that basically leads to a filling up of all oil inventory available globally sometime in May or June. The only way to then balance your market is for the price to drop to such low levels that it backs out physical supply.
The price that you would need for people to shut down already producing fields is exceedingly low.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.