1:54 p.m. ET, April 15, 2020
Epic supply glut: Oil barrels are piling up at a record pace
From CNN Business' Matt Egan
The coronavirus pandemic is causing
oil barrels to pile up at an unprecedented rate.
The amount of oil in commercial storage skyrocketed by 19.2 million barrels last week, according to the US Energy Information Administration.
It was easily the biggest one-week build since EIA weekly records began in 1982.
The oil market has been
clobbered by the coronavirus crisis, with US crude plunging to a
fresh 18-year low of $19.20 a barrel Wednesday. That's despite the record-setting production cuts announced by OPEC+.
Crude stockpiles are now above 500 million barrels for the first time since June 2017, according to ClipperData.
That's despite the fact that US oil imports dropped, as did domestic oil production -- part of what will likely be a
sharp drop in output.
The core issue: Demand collapsed at a faster pace because of the health restrictions that have forced flight cancellations and work-from-home requirements.
So refinery activity plunged to 12-year lows, as there simply wasn't a need to churn out more jet fuel and motor gasoline.
“As long as the virus-related containment measures remain in place, product demand should remain weak," Capital Economics wrote in a note Wednesday.