Crude oil futures fell during Wednesday's trading to hit the lowest level in 18 years, after warnings from the IEA and as supply production cuts by major crude producers failed to tame demand concerns.
As of 08:12 GMT, West Texas Intermediate (WTI) crude futures traded at $19.60 per barrel, while the lowest level recorded during the session was at 19.17, which is the lowest since 2002.
Brent crude dipped for a fourth straight session to $28.42 a barrel, while the lowest level recorded during the session was at $27.94.
The drop in oil prices was the result of mounting investor concern again about record supply cuts and the potential inability to balance markets devastated by declining demand due to the outbreak of the virus.
The International Energy Agency (IEA) predicted that global demand will fall to its lowest since 1995 in April.
“Global oil demand is set to plunge by 29 mb/d in April. Even if lockdowns ease in 2nd half, we expect demand to drop by 9 mb/d in 2020, erasing years of growth,” IEA chief Fatih Birol has tweeted.
Moreover, according to the American Petroleum Institute, crude inventories increased by 13.1 million barrels in the week ended April 10, more than analysts had expected to increase by 11.7 million barrels.
On the supply side, OPEC, along with Russia and other producing countries, agreed to cut oil production by about 9.7 million barrels per day from May to June, equivalent to about 10 percent of the world's supply before the virus broke out.
The United States, the world's largest producer of crude, said it would also cut production due to price collapses, while other countries could help increase oil reduction estimates to about 19.5 million barrels per day.
On the other hand, the IMF's warnings about what could be a severe global recession since the Great Depression of the 1930s have affected the sentiment in financial markets.
The IMF also said that the global economy is expected to contract by 3% during the current year in a spectacular collapse driven by the coronavirus.
The outbreak of Coivd-19 has claimed more than 126,800 lives and infected more than two million people worldwide, according to calculations by Johns Hopkins University.
Meanwhile, the dollar
index, which measures the performance of six major currencies against the US
dollar, advanced 0.47 percent at 99.35.