Oil prices plunge, demand falls amid lack of storage

Oil prices plunged on Tuesday amid concerns of rapidly filling crude storages globally. On top of that, demand may only recover once restrictions on economic and social activity will be lifted.

U.S. West Texas Intermediate crude futures slipped 12.8%, or $1.64, at $11.14 per barrel. Brent crude futures dropped 4.3%, or 85 cents, at $19.14 per barrel. 

Despite the 9.7 million bpd production cut to be implemented on May 1 by OPEC and its allies including Russia, that volume might not compensate for the drop in demand.

Due to the fall in demand, 85% of oil storages worldwide are estimated to have been filled as of last week, according to data by Kpler.

Oil traders have resorted to hiring expensive U.S. vessels to store or ship oil overseas as the oil industry is desperate to find storage.