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WTI oil price had made a strong recovery at one point yesterday, inching up 18 percent from previous close. Yet, it was trading at $23.5/bbl. Such has been the bloodbath in the oil markets in the past two weeks. Brent and WTI have lost half the value in ten trading sessions – a bear rally, that is unprecedented since World war II.

Oil came within whiskers breaking the $20/bbl barrier on Wednesday, missing by half a percentage point. Yesterday’s rebound should not be read much into, as it followed a series of stimulus announcements by major European countries and the second leg of the US support package. Th rally will be lucky to last a whole trading session, let alone finding momentum – as the oil crisis is way beyond the one being witnessed in the capital markets.

The demand forecast keeps getting lower with every passing day and with the ever-increasing coronavirus patient count. Some of the worst industrial growth numbers have bene reported in China in decades, the global jet fuel demand is expected to hit rock bottom. The gasoline prices may well have reduced substantially – but people are not exactly queuing up to fill up the tanks.

The damage already done is enough to keep oil in the early $30s, even if Corona were to fade away from today onwards. Such is the situation that global inventories are expected to be brimming with oil in less than two weeks, as domestic, industrial and aviation fuel demand is all set to hit multiyear lows. This year promises to be the first since 2009, with a negative global oil consumption growth. Official announcements may not have been made – but these are recession times, and oil has in most cases acted as a true leading indicator.

And then there is the price war – led by Saudi Arabia and Russia. Saudis are bent on ramping up oil production at all costs, even if takes it down to the teens. Russia says it has had enough of contributing and cooperating in the production freeze deals. Canada is already feeling the pinch. Shale companies will soon go out of business. But that won’t be near enough to balance the massively oversupplied market.

Experts say that the oil market has not been this oversupplied in over 30 years. Even without the demand constraints, this supply glut would be enough to keep the bears in the pole position. There will be no clear winners in the price war. The inventories will soon be exhausted. There will not be many takers of oil. No one is ready to cut production. These surely are never-seen-before times. At least for those alive.