Oil prices plunge as coronavirus saps demand

Oil nosedived to its lowest level in more than 20 years yesterday, at one point crashing about 40 per cent to below US$11.

The plunge was fuelled by fears of weaker demand amid the coronavirus pandemic and a supply glut.

The US West Texas Intermediate contract hit a low of US$10.77 a barrel, the lowest since 1998. But analysts said the sell-off was exaggerated by the contract's expiry today.

Brent crude, the international benchmark, whose contract has already expired, was under less pressure, falling by about 5.8 per cent to a little over US$26 a barrel.

Despite the unprecedented output deal agreed a week ago by the Organisation of Petroleum Exporting Countries and other large oil producers led by Russia, known as Opec+, the oil market remains massively oversupplied as the lockdowns to fight the spread of the virus cut global crude demand by about a third.