The world may soon run out of space to store its extra oil as Saudi Arabia prepares to increase its fossil fuel production even as global demand for energy continues to fall due to the Covid-19 pandemic. Oil storage levels across the world’s storage facilities have climbed to about three-quarters full on average since the January shutdown of major refineries in China’s industrial heartlands to stem the outbreak of the coronavirus. The oil industry is expected to keep filling oil storage with crude in the weeks and months ahead as the pandemic’s economic contagion spreads through the rest of the world, cutting demand for natural resources including oil. Canada may be days away from running out of storage for its domestic oil production, according to analysts at Rystad Energy, and the rest of the world may follow suit in a few months. The analysts expect that oil-rich regions in Western Canada will need to rein in production by about 400,000 barrels of oil a day by the end of the month. “Compounding the situation is the near-certainty of a steep reduction in crude-by-rail exports this year,” said Thomas Liles, an analyst at Rystad, “As well as deferral of spring maintenance… Read full this story
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