Traders also told the WSJ that Russian Federation - the oil exporter whose market share Saudi Arabia has been most keen to capture, has been able to compensate some of the decline in exports to Europe by redirecting them to China, a country where demand has been enjoying a slow recovery amid that country's efforts to fight the pandemic.
US West Texas Intermediate (WTI) crude futures hit a low of US$19.92 in early trading and last traded down 5.2 per cent, or US$1.12, at US$20.39 a barrel as of 2332 GMT, while Brent futures fell 5.6 per cent, or US$1.40, to US$23.53 a barrel.
The coronavirus pandemic has already killed about 32,000 people and sickened more than 500,000 worldwide. Meanwhile, the U.S.'s top infectious disease expert said deaths there may reach 200,000. A delegate told Bloomberg that OPEC nations, Saudi Arabia amongst them, are opposed convening an emergency panel on tanking prices.More news: MacBook Air display problem confirmed by leaked Apple memo
Still, any move Saudi Arabia and the Organization of the Petroleum Exporting Countries makes may not be enough, Goldman Sachs said last week in a note. As it becomes increasingly problematic to quickly unload stored oil because of a lack of demand due to the lockdowns imposed amid the COVID-19 outbreak, sellers have reduced prices dramatically. "A demand shock of this magnitude will overwhelm any supply response including any potential core-OPEC output freeze or cut", they wrote.
Prompt prices are lower than those in future months in a contango market amid a supply glut, encouraging traders to store oil for future sales.
According to analysts at energy consultancy firm Rystad Energy, Canada may be just days away from running out of storage for its own domestic oil production, and the oil-rich regions in Western Canada will need to curtail its production by about 400,000 barrels of oil a day before the month ends.More news: Brad Stevens: Marcus Smart Doing 'Great' During Self-Isolation
"Oil prices failed to keep pace, with growing (coronavirus) lock-down measures and reports that this could drive global demand down 20%, potentially pushing the world to run out of storage capacity", said Morgan Stanley analyst Devin McDermott, citing a forecast by the Paris-based International Energy Agency.
This past week, the Baker Hughes rig count fell by 40, the most since 2015, as companies swiftly pull in spending.More news: Coronavirus: Six more deaths confirmed in Northern Ireland