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Despite last weekend’s historic deal between the OPEC members and Russia to cut production, the world oil market remains massively oversupplied, with further falls in price possible, the International Energy Agency said on Wednesday.

The report came as oil prices slumped further, with West Texas Intermediate, the U.S. benchmark, falling 2 percent to below $20 a barrel. Brent crude was down 4 percent, to about $28.30 a barrel. Prices are down about 60 percent this year.

The agency forecast that global demand for oil would fall about one-third this month, or 29 million barrels a day, because of the effects of the coronavirus pandemic, while supplies will remain high because of production increases during the now-ended price war between Saudi Arabia and Russia.

Fatih Birol, the agency’s executive director, said that this month was likely to be remembered as “Black April” in the oil industry. Mr. Birol praised the deal to cut production as a good start, but added: “We lost two very important months in the oil industry, and we may still see prices getting some downward pressures in the next days or weeks to come.”

The Paris-based agency warned that a glut of 12 million barrels a day would swell during the first half of the year. This flood of oil, analysts from the agency wrote, “still threatens to overwhelm the logistics of the oil industry — ships, pipelines, and storage tanks — in the coming weeks.”

Article source: https://www.nytimes.com/2020/04/15/business/stock-market-covid-coronavirus.html