- WTI down nearly 4% to lowest since May 2003.
- More airlines close down services.
Oil prices fell for aÂ third session on Wednesday with U.S. crude futures tumbling to aÂ 17-year low as the outlook for fuel demand darkened with travelÂ and social lockdowns triggered by the coronavirus epidemic.
U.S. crude was down 84 cents, or 3.12%, at $26.11 aÂ barrel by 0822 GMT, having earlier fallen to $25.83 a barrel,Â the lowest since May 2003.
Brent crude was trading down 37 cents, or 1.29%, atÂ $28.36 a barrel by 0650 GMT, after dropping to $28.05, theÂ lowest since early 2016.Â
“The oil demand collapse from the spreading coronavirusÂ looks increasingly sharp,” Goldman Sachs said in a noteÂ forecasting a fall in the price of Brent to as low as $20 aÂ barrel in the second quarter, a level not seen since early 2002.
The bank also expects a demand contraction of 8 millionÂ barrels per day (bpd) by late March due to the pandemic and anÂ annual decline in 2020 of 1.1 million bpd, which it said wouldÂ be the most on record.
In efforts to support economies, the world’s richest nationsÂ prepared to unleash trillions of dollars of spending to lessenÂ the fallout from the coronavirus outbreak, as well as imposingÂ social restrictions not seen since World War Two.
The impact on oil demand is starting to show in officialÂ statistics with Japan’s trade bureau saying on Wednesday thatÂ crude imports into the world’s third-biggest economy fell 9%Â from a year earlier in February.
Virgin Australia became the latest airline to shut down itsÂ international network with the suspension of all overseasÂ flights, while Prime Minister Scott Morrison warned that theÂ situation could last six months or more.
Also in Australia, Oil Search joined other energyÂ explorers in slashing expenditure and new activity to cope withÂ the fall in prices.Â
Elsewhere, Iraq’s oil minister pleaded for an emergencyÂ meeting between members of the Organization of the PetroleumÂ Exporting Countries (OPEC) and non-OPEC producers to discussÂ immediate action to help balance the oil market.
A price war has broken out amid the evaporation of demandÂ after the collapse of an agreement on withholding supply betweenÂ OPEC and major producers including Russia, a grouping known asÂ OPEC+.
Iraqi oil minister, Thamer al-Ghadhban, asked OPEC to helpÂ “urgently achieve” extraordinary meetings of the OPEC+ group toÂ “discuss all possible ways” to rebalance the oil market.
“A deeply imbalanced supply and demand relationship willÂ keep putting oil prices under pressure,” said Margaret Yang,Â analyst at CMC Markets in Singapore.
“Major oil producers are ramping up oil supply in a timeÂ when global demand is dampened by border controls and trafficÂ bans.”