Earlier today, Barclays cut its crude oil price forecasts for this year on worsening outlook driven by the raging coronavirus pandemic even as the price war between Saudi Arabia and Russia threatens oversupply in markets. According to the bank, UK Brent oil price outlook has been revised lower to $31 per barrel while WTI oil could average around $28 per barrel this year.

Crude oil prices are expected to remain under pressure unless the world succeeds in containing the spread of the virus effectively. In addition, Saudi Arabia’s plans to flood markets with cheaper oil amid weakening demand is likely to add extra pressure on oil prices in the near future.

According to Barclays, global available onshore storage capacity is now estimated at around 1.5 billion bpd. However, there could be an oversupply of around 5 million bpd this year, with Q2 2020 experiencing an oversupply of as much as 10 million bpd. The bank also noted that the US government’s plans to fill up its strategic oil reserves will be unable to offer support to oil producers in the country.

According to data from the US Department of Energy, available SPR storage in the country amounts to less than 80 million barrels, and when filled over six months, would increase demand by just about 0.5 million bpd. This meagre amount is far less than the predicted oversupply global oil markets are set to experience this year.