WTI oil prices plummet to record low on concerns over storage

US oil prices dived to its lowest level ever — below US$10 — on Monday after crashing more than 45 percent in a market flooded with crude and slammed by evaporating demand in the face of the coronavirus pandemic.

Around 1650 GMT, the US benchmark West Texas Intermediate crude for May delivery tanked to US$7.9 per barrel in New York trading.

Trade, however, was also technically driven as investors closed out their positions ahead of the May contract expiry on Monday.

The June contract was down 8.8 percent at US$22.82.

“The real problem of the global supply-demand imbalance has started to really manifest itself in prices,” said Rystad Energy analyst Bjornar Tonhaugen.

“As production continues relatively unscathed, storage is filling up by the day. The world is using less and less oil and producers now feel how this translates in prices.”

The European benchmark contract, London Brent North Sea oil for June delivery, was down 6.3 percent at US$26.30 per barrel.

Traders are becoming more and more concerned that oil storage facilities are reaching their limits, as stockpiles continue to build owing to the crash in demand caused by the COVID-19 pandemic.