SINGAPORE: Brent crude plunged more than 12 per cent to below $17 a barrel Wednesday while US oil erased early gains and fell, as the coronavirus strangles demand and ravages energy markets, while storage facilities approach full capacity.
In another day of volatile trading, US benchmark WTI surged in early Asian deals while Brent also edged up on news that top producers had held talks — only for prices to suddenly change course.
Brent dropped 12.31 percent to $16.98 a barrel, extending heavy losses from a day earlier.
WTI for June delivery, which had rebounded about 20 percent at the open, was down around five percent at $11 a barrel in the afternoon.
On Monday, WTI for May delivery collapsed to an unprecedented low of minus $40.32 as traders scrambled to sell it before the contract expired Tuesday, but could find few buyers with storage capacity fast filling up.
The negative prices meant that traders were forced to pay to have the crude taken off their hands.
Analysts said the morning bounce was driven by news that members of exporting group OPEC, as well as some allies in the OPEC+ grouping, held a teleconference Tuesday — but grim reality soon returned to the markets.
Prices have plunged as lockdowns and travel restrictions introduced worldwide to stem the spread of the virus hammer demand, and observers believe there is little way out for oil except bringing an end to the pandemic.