A flood of cheap supplies coming to the market from Saudi Arabia and the United Arab Emirates exacerbated pressure on prices. Gulf producers are increasing production as part of a price war with Russia.
Brent crude fell 2.57 dollars, or 7.2 percent, to 33.22 dollars per barrel, while US West Texas Intermediate crude fell 1.48 dollars or 4.5 percent to 31.50 dollars.
Meanwhile, global stocks tumbled and the Dow Jones was heading towards its worst performance since the crash of the “Black Monday” in 1987 after Trump announced travel restrictions.
Prices pared their losses for a short period after the New York Federal Reserve Bank said it would increase purchases of treasury bonds and create new repurchases, but the recovery quickly faded in various markets.
“The massacre of the global market continues as Wall Street struggles to understand how long the global pandemic will disrupt travel, trade and daily life,” said Edward Moya, chief market analyst at Oanda in New York.
“Brent crude appears to be losing another ten percent, as it appears that demand expectations will know nothing more than further deterioration.”