FXStreet reports that the latest price action illustrates the extraordinary situation in which the oil market finds itself near-term but, in the opinion of strategists at Danske Bank, there are also stabilising forces longer term.

"Over time, physical arbitrage should reduce the elevated Brent-WTI spread, albeit subject to transportation options and costs."

"We expect stabilisation to come from fundamental market dynamics ahead. The current levels of oil prices will force producers to (continue to) cut back production but as demand recovers (at least partially) when lockdowns are eased, the inventory build should ease."

"We see Brent averaging USD35/bbl this year, rising to USD44/bbl on average in 2021."