In February, Sandstorms choked Iraq, knocking down oil production, crude quality and vessel availability.

Violence in Libya cut production by 275 thousand barrels of oil per day (bbl/d) and Nigeria was also affected by unrest.

On the ground and in the numbers, the beginning of the year was full of forces that slowed supply builds and expanded oil demand.

But even with epic weather, unrest in Libya and a scaling back on spending by U.S. companies, WTI prices may linger in the $40s for two quarters, said Damien Courvalin, senior strategist for Goldman Sachs’ global investment research commodities team.

Overall, OPEC member countries saw oil supply fall as disruptions ate up 2.7 million bbl/d (MMbbl/d) due to outages, the U.S. Energy Information Administration (EIA) reported March 10.

Demand rose in the Americas, where Brazil faced drought and the U.S. fought off the cold, Courvalin said.

But oil stocks at Cushing, Okla., increased by 2.32 MMbbl to 51.54 MMbbl, slightly below the prior record of 51.86 MMbbl in the week ending Jan. 11, 2013, said Richard Hastings, analyst, Global Hunter Securities.

Since mid-October 2014, Cushing crude stocks have increased by 150% compared with relative growth of 39.9% for the entire Midwest district during the same period.

While Bakken production appears to be scaling back, Cushing oil comes from the Niobrara, the Permian and even reverse flows from the Gulf Coast, Hastings said.

Imports have also increased as the spread between LLS and Brent narrowed earlier this year, Courvalin said.

Despite capex drops at nearly all publically traded oil and gas companies, U.S. production is still expected to grow by 7% or nearly 1 MMbbl/d in 2015, according to the EIA.

“U.S. E&Ps are exhibiting a faster focus on financial discipline than we had expected,” Courvalin said in a March 8 report.

One factor is the ramp-up of the Flanagan South pipeline, which brings heavy crude from Canada.

Pipeline regulations allow for crude to remain in Cushing before heading to the U.S. Gulf Coast (USGC), which has led to crude accumulating in Cushing. The widening of the WTI-LLS differential should ultimately help bring crude down to the USGC, where storage capacity utilization remains at 56% compared to 70% at Cushing.

Still, with no outlet for its oil besides Canada, U.S. producers have seen WTI remains weak as Brent differentials climbed as high as 20%.

Can’t Cut Enough

Goldman Sachs predicted that oil demand could grow in 2015.

But “we did not expect demand to be so strong this soon,” Courvalin said.

Take away the bad weather and unrest in OPEC countries and Brent will drop again, he said.

In the shale plays, U.S. E&Ps have mapped out 2015 as a year of spending cuts, manpower cuts and careful balancing of cash flow.

“However, they are also preparing to ramp up activity later this year by successfully raising equity, reducing debt and building an uncompleted well war chest,” Courvalin said.

The firm’s forecast of $65 oil for 2016 forecast may be offset by E&Ps quickly redeploying rigs in a lower cost environment.

Prices may need to go even lower for capex and rig cuts to slow production, Courvalin said. And E&Ps face a danger in preparing to deluge the market when prices rebound.

On many earnings calls, E&P executives have focused on reducing leverage and delivering strong production in the latter part of 2015 and into 2016.

Companies are also likely to high-grade, boosting production per rig by moving into their most economical counties. Rig declines can reverse as they become available under more attractive terms.

Still, some CEOs have said they will not grow production in a down market.

Rosetta Resources Inc. (NASDAQ: ROSE) is one of a few companies that has announced it will cut capex by 71% while also lowering production by 18%.

EOG Resources Inc. (NYSE: EOG) is deliberately keeping its production flat.

“We’re not interested in growing oil in a low price environment,” William R. “Bill” Thomas, EOG chairman and CEO, said in February.

More E&Ps may need to slow down, Courvalin said.

“While we believe shale is ultimately the solution to meeting demand growth medium term, production growth still has to be throttled back in the near term,” he said.