Rising production and collapsing demand due to the Covid-19 pandemic is causing an unprecedented glut in the oil market.
As a result, we are currently witnessing a pronounced supply and demand shock that has sent oil prices to a multi-year low. At the current pace of production, global oil storage capacity will be filled by the end of the second quarter. This situation is already causing price pressures at oil wells, where oil producers are finding it increasingly difficult to sell their inventories. As a consequence, energy stocks have been the worst performing year-to-date in global equity markets, while credit spreads of sub-investment grade energy companies have widened dramatically, signaling in...
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