The historic OPEC+ "Mexican Standoff" production cut came and went, and after a very short kneejerk spike higher oil has continued to plunge to historic lows for the two reasons we laid out previously: i) the production cut was not nearly enough to offset the demand collapse of as much as 36 million barrels, and ii) every day that tens of millions of excess barrels are produced brings us one day closer to that catastrophic D-day when oil storage runs out.

Of course, just like not all oil producers are equal - recall Goldman recently predicted that landlocked producers may see oil prices go negative, as they run out of buyers or places where to store the oil, while tanker access to most Brent exporters means that the price of Brent will not drop materially below $20 - not all storage is equal either, and while Cushing and ARA commercial storage is expected to hit full in just a few months at the current rate of net supply, many producers are using water storage as a flexible alternative.

As a result, traders are now storing an estimated record 160 million barrels of oil on ships - double the level from two weeks ago as they seek to tackle a glut of stocks, Reuters reportsas traders have rushed to find storage on land and at sea in what is believed to be the biggest oil glut in history.

The surge in water storage, which started with Saudi Arabia unleashing an armada of tankers last month to flood the world with cheap oil...