US crude crashed to below $15 a barrel Monday, its lowest level for over two decades, with traders concerned that storage facilities are filling up as the coronavirus pandemic strangles demand.
West Texas Intermediate (WTI), the US benchmark, plunged rapidly in opening trade in Asia and was changing hands for $14.90 a barrel in the afternoon, down 18.45 percent.
International benchmark Brent was less badly affected, as the storage concerns mainly relate to WTI facilities in the US, and was down three percent at $27.23 a barrel in the afternoon.
Oil markets have plunged in recent weeks as lockdowns and travel restrictions to fight the coronavirus around the world batter demand.
The crisis was compounded after Saudi Arabia, kingpin of exporting group OPEC, launched a price war with non-OPEC member Russia.
Riyadh and Moscow drew a line under their dispute earlier this month when they and other countries agreed to cut output by almost 10 million barrels a day to boost virus-hit markets.
But prices have continued to fall as analysts say the cuts are not enough -- and US crude's collapse Monday was triggered by worries that key storage facilities in Cushing, Oklahoma, are under pressure.
In a sign of the level of oversupply, the US Energy Information Administration said crude inventories in the world's biggest economy rose by 19.25 million barrels last week.
Trifecta Consultants analyst Sukrit Vijayakar said US refineries were not processing the crude supplies fast enough, resulting in fewer buyers and storage facilities filling up.
There are also plenty of supplies from the Middle East with no buyers as "freight costs are high", he told AFP.
"I think we will see a test of the 1998 lows at $11 sooner rather than later," OANDA senior market analyst Jeffrey Halley told AFP.
ANZ said in a note that "crude oil prices remained under pressure, as projections of weaker demand weigh on sentiment".
"Despite the OPEC+ alliance agreeing to an unprecedented cut in output, the physical market is awash with oil," it said, referring to the Organization of the Petroleum Exporting Countries and non-OPEC partners.
"Concern continues to mount that storage facilities in the US will run out of capacity."