The global energy market is currently suffering the biggest oil glut on record. Over the past few weeks, the market has been flooded with cheap oil and has been unable to cope with the oversupply. Saudi Arabia’s decision to slash its crude prices made things even worse. At one point, some oil producers had to pay buyers to take fuel off their hands, at least this was true for May futures contracts. It turned out that for some producers it was more profitable to pay to dispose of excess oil than to store it or put production on halt. According to analysts at Scotiabank, the oil and gas industry across the world is now facing unprecedented times. The global coronavirus pandemic has led to widespread quarantine measures and industry shutdowns all over the globe. This situation has been impacting demand for oil and gas for the last several months putting downward pressure on oil prices. However, markets still hope for stabilization, especially now when the new OPEC+ deal on output cuts came into force on May 1. Meanwhile, oil traders are trying to get rid of the unprofitable asset.
