March 30 (UPI) — Oil prices slumped to an 18-year low Monday on fears that the coronavirus pandemic could trigger a long-term collapse in demand and Saudi Arabia continued to saturate the market.
The international benchmark Brent crude fell by more than 7 percent to a low of $23.03 per barrel at its lowest point in overnight trading — its lowest price since 2002.
The U.S. benchmark West Texas Intermediate fell to as low $19.92 per barrel, also dropping by more than 7 percent.
By 7:45 a.m. EDT, the commodities had rebounded a bit, with both indexes down by around 5 percent.
Overall, oil prices have plummeted by two-thirds this year.
The fresh lows came after President Donald Trump on Sunday backed off his stated goal of getting the U.S. economy back up and running by Easter, April 12, and instead extended social distancing guidelines until the end of April.
Concerns the United States could be in an extended period of reduced oil demand were also deepened when White House medical adviser Dr. Anthony Fauci warned that up to 200,000 Americans could die in the pandemic.
Meanwhile, Saudi Arabia has given no indication of relenting in its strategy of flooding the market with oil in a price war with rival producer Russia, despite pressure to do so from the United States.
In response to falling prices and quickly diminishing storage capacity, global producers are shutting down rigs at the quickest pace in 35 years, especially in landlocked areas of the United States, where the shale oil industry is seen as especially vulnerable to the negative market forces.