The oil supply will exceed the demand at least by the end of the year. Also, it is possible the trend to continue in 2021, keeping the price of the raw material under pressure.

The main reason for the negative oil prices was an increase in supply, accompanied by a sharp decline in demand. Coronavirus pandemic halted economic activity in many areas and sectors, which seriously affected the demand for petroleum products.

There was a lack of storage capacity, and many buyers, especially those for hedging, had to indicate where to deliver. They were forced to make a quick sale of their positions, so it came at high prices. The high value of hedging on the background of slowing economic activity created a giant gap, which seriously hurt the price of oil futures.

It is interesting the price war between Russia and Saudi Arabia aims to push US shale oil producers out of the market. This is the main reason OPEC+ group not to take more serious actions to stabilize the markets. The agreed production cutbacks are highly insufficient for the loss of demand mind coronavirus pandemic.