Global demand for oil has disappeared during the pandemic, even as the supply side seems to ignore that reality and keep rolling along. There's still a price war going on between Russia and Saudi Arabia, CNN reports. Prices have plunged; a trading house bid negative 19 cents per barrel earlier this month, per Bloomberg, effectively making an offer to dispose of it. "The market is starting to signal that not only is there no demand for this crude, eventually there could be nowhere for it to go," an analyst said. Storage space is running out. "The price is trying to go to a level to force companies to keep the oil in the ground. If it has to go negative to incentivize that behavior, then it will," the analyst said.
President Trump said Tuesday that he discussed the situation with the leaders of Russia and Saudi Arabia, per the Wall Street Journal. The chances of demand increasing soon seem to worsen Wednesday, when new surveys showed factories in the US, Asia and Europe have slashed production and jobs faster than at any time since the financial crisis. US oil prices dropped Wednesday after climbing the day before, and Saudi Arabia said it's producing about 2 million barrels a day more than it was a month ago. Citing forecasts showing nearly one-fourth of demand evaporating during the pandemic, resolving the price war alone won't bring a quick solution, an analyst said: "Even if we get some kind of agreement, it will be difficult to balance the market for a while." (Read more oil prices stories.)