Oil markets have a very simple problem to understand, but extremely complex to implement by late May-early June: oil supply cannot exceed demand in aggregate for at least few months. So supply will have to go down and meet demand. #OOTT #OPEC

1. This will be the most painful and most difficult period the global oil industry will go through. Thousands of well are being shut-in or chocked back right now, and that means that ~20% of global capacity might need to be off-line within 30-45 days.

2. OPEC and Non-OPEC (Russia) committed to cut by 22% because they had no other options. All other producers will be forced to do the same and this is already happening in the US and Canada. The size of the shut-ins/chock-backs will likely end up in the same order of magnitude.

3. Basically, the oil industry will have to work without a storage buffer for few months. Supply will have to adapt to a very uncertain demand outlook, based on how the economic shutdown of activity is rolled back and how much oil demand recovers.

4. It's too early to tell the damage that will be done to supply capacity over time. It will depend on the virus itself and how we manage to contain it/minimize its disruptive effect. Testing and tracking the virus are the most important elements for the oil industry right now.

5. Rather than a bailout, the oil industry needs sounds health policies and plans to bring back economic activity by deploying testing and isolation protocols, globally. This is why the road will be bumpy.