Crude oil prices зentered negative territory on Monday, which is a clear warning of how little space is left for the storage of black gold. Negative prices are a way for the market to tell producers that they need to stop producing in such quantities.

The situation is complicated because there is still too much oil being produced in a world that cannot use it.

On April 12, an agreement was reached to curtail production, after Mexico and other OPEC+ member states had been in dispute for 4 days. But so far, the deal has not made a significant difference in terms of supply.

The deal is only just beginning to be implemented by a small number of parties to the agreement, and Russia and Saudi Arabia are unlikely to make major cuts to production before the deal officially comes into force on May 1. Meanwhile, 40 million barrels of Saudi oil are in the process of being transported to the United States along with at least 11 million barrels of Iraqi oil. All deliveries must be completed by early June.

All other signs in the world are also very demotivating. Non-OPEC member countries do not respond quickly enough. Production in the US has not decreased significantly, as shown by weekly data from the Energy Information Administration.

In the meantime, the lack of oil storage at the Petroleum Distribution Center, located in Cushing, Oklahoma, seems likely to continue until at least June. But not only Cushing is running out of oil storage capacity, but India’s storage facilities are also almost full.

Desperate times require desperate measures. In Europe, petroleum products are even stored in barges. In the US, pipeline operator Energy Transfer LP is looking for a way to make room for its Texas pipeline to store 2 million barrels of oil.

Such decisions only delay the inevitable. Unless manufacturers start reducing their supply much more aggressively, another batch of negative territory prices will have to encourage them to do so.