Oil prices fell more than $1 a barrel at the start of the trading session early Monday, as demand outlook for crude remains bleak amidst the coronavirus pandemic.
Brent crude futures fell $1.84, or 6.8%, to $25.14 a barrel. West Texas Intermediate (WTI) crude futures fell $1.26, or 5.6%, to $21.37 a barrel.
“We believe oil prices will continue to fall into the teens in the short term amid disaster demand destruction, building global stocks and no production limits after April 1,” said Joseph McMonigle, senior energy policy analyst at Hedgeye Potomac Research, in a note.
Oil prices have fallen for four straight weeks and have lost about 60% since the start of the year.
The coronavirus, which has infected more than 325,000 and killed over 14,000 worldwide, has disrupted business, travel and daily life. Many oil companies have rushed to cut spending and some producers have already begun putting employees on furlough.
The market has had to contend with the twin shocks of the demand destruction caused by the coronavirus pandemic and the unexpected oil price war that erupted between producers Russia and Saudi Arabia earlier this month.
The current production cut deal expires March 31.
Demand is expected to fall by more than 10 million barrels per day (bpd), or about 10% of daily global crude consumption, said Giovanni Serio, head of research at Vitol, the world’s biggest oil trader.
Goldman Sachs estimated demand loss could total 8 million barrels per day (bpd), brought about by countries slowing economic activity to combat the coronavirus outbreak