[nicholas73]

Yes, but the magnitude can vary widely. The world used to use 100m barrels per day (bpd), and the last oil crash in 2016 had 2m bpd of oversupply. Just 2% unbalanced in supply/demand caused wildly fluctuating prices, due to the same reason as today - nowhere to store oil.

Now we've knocked off some 35m bpd of demand, and have millions of bpd of voluntary and involuntary shutdown, some of which will not return. This is a gigantic variation compared to any other crash in history.

So why won't prices necessarily skyrocket if demand returns? First you have a huge amount of stored oil to work through. Second you have potentially fast response shale to quickly increase production again.

But, shale only increased 1m bpd per year even during good times, so it can only make up for so much supply destruction. Secondly, this time shale companies may be mortally wounded. Even if they get taken over in bankruptcy you can have a lot of displaced workers and service companies.

So it really depends on how long the downturn lasts. If there is a quick rebound, like if a cure to covid-19 is found, then it shouldn't be too bad. But if this drags out through 2020, I think even $100 oil will start to look cheap in a few years.