Futures for major global crude benchmarks Brent and US West Texas intermediate (WTI) were down on Monday, as the coronavirus outbreak continued to rattle global energy markets.
US oil led the losses, with WTI for June delivery falling over 26 percent to $12.49 per barrel, as of 14:00 GMT. Meanwhile, the cost of Brent crude oil dropped more than three percent, trading below $20 a barrel.
The drop in crude prices comes amid concerns that the supply glut shows no signs of easing, as producers continue to pump oil while facilities used to store the commodity are rapidly filling up.
Analysts told RT that one of the largest storage hubs in the world – at Cushing, Oklahoma in the US – could reach full capacity in around two weeks. It was revealed earlier that commercial US crude oil inventories were nearing an all-time record, as they rose by three percent to 518.6 million barrels for the week ending April 17.
Last week, WTI contracts for May delivery crossed into negative territory for the first time in history, plummeting to -$37.63 per barrel. Despite making a recovery to around $13 per barrel, US crude prices are still too low for producers to make a profit – particularly in the shale industry, which expects another round of bankruptcies.
Major oil exporters – the members of OPEC and allied oil producers – have recently agreed to cut global output by nearly 10 million barrels per day to help the oil market to rebound. However, the measure may fail to boost prices, with the coronavirus pandemic having severely reduced global demand for crude.