US oil prices further tanked a staggering 24% to $20.37 a barrel. That's the lowest level since February 2002.
The coronavirus pandemic has upended the oil demand is said to be one of the major reasons for this price collapse. The competition between Russia and Saudi Arabia, two major oil producers also added to the woes. In a spiraling crisis situation, these two countries also shy away from roles as price stabilizers. Russia refused to cut production, in a bid to drown America's high-cost shale producers in a sea of cheap crude.
Due to coronavirus fears, global travel has come down, eating into the world's once-insatiable thirst for oil. Countless flights have been canceled. The cruise industry is at a standstill. Highways are empty. Factories across the world downed shutters.
A combination of excess supply and shrinking demand has sent light crude oil down 60% so far this year. With more travel restrictions and quarantines accelerating, energy analysts predict less demand for oil in future.
Goldman Sachs now expects 2020 oil demand to shrink by 1.1 million barrels per day. Rystad Energy calculates for a plunge of 2.8 million barrels per day in 2020. That's up fourfold from the energy firm's previous call for a drop of just 600,000 barrels per day.