Crude math: why $10 oil could be worth less than nothing

Oil prices are still sinking.
Despite a sweeping plan by OPEC+ to cut production, the hit to oil demand from global COVID-19 lockdowns—and dwindling storage—is sending crude prices to levels not seen for at least twenty years.
On Monday morning in Europe, WTI crude, which is weighted towards U.S. crude, was down nearly 38% to $11.30/barrel—the lowest level in more than two decades, surpassing the 18-year low on Friday. The Brent crude contract, which traditionally reflects the North Sea, was down 6% on the day, at $26.36/barrel.
«The real problem of the global supply-demand imbalance has started to really manifest itself in prices,» said Bjørnar Tonhaugen, head of oil markets at consultancy Rystad Energy, in a morning comment. «As production continues relatively unscathed, storages are filling up by the day. The world is using less and less oil and producers now feel how this translates in prices.»
Until even more commitments to production cuts from oil producing countries arrive, prices still had further down to go, he predicted.
The current dip reflects just how weak global demand is for oil—and how little impact, ultimately, even the 9.7 million barrels/day plus of production cuts from OPEC+ are expected to do to bring prices back while widespread lockdowns are in force.