As a coronavirus-triggered collapse in demand eclipsed a deal to cut output, US crude fell about 20 percent to below US$15 a barrel on Monday. The slump is its lowest level in about two decades.
West Texas Intermediate fell 18.7 percent to US$14.84 a barrel. Brent crude was off 1.5 percent at US$27.64 a barrel.
As lockdowns and travel restrictions around the globe batter demand for the commodity, oil markets have plunged in recent weeks. The crisis was compounded after Saudi Arabia launched a price war with non-OPEC member Russia.
Output cuts agreed by Saudi Arabia, Russia and other countries by almost 10 million barrels a day to support the markets. However, oil prices have continued to slump heavily. The output cuts will not be enough to make up for massive falls in demand, analysts said.
Crude inventories in the US rose by 19.25 million barrels last week, adding to the woes of the oversupplied world market. Chevron Corp, BP, Total and many other majors have announced supply reductions. However, physical crude markets suggest prices will keep falling as economic growth is sagging swiftly.
Exploration and production companies in North America have trimmed their budgets by roughly 36 percent on a year-over-year basis while international companies have slashed budgets by 23 percent.
