U.S. oil prices fell to the lowest level in eighteen years Wednesday, while global crude sank near $26 per barrel, as investors continue to re-set prices in the wake of airline travel restrictions, collapsing China demand and record-high production from Saudi Arabia.
With airlines slashing capacity around the world as governments restrict travel in order to tame the coronavirus spread, and analysts forecasting sharp and recession-like pullbacks from the world's biggest energy consumers, global crude prices have been unable to find a floor since the global stock market sell-off began in late February.
Brent crude futures contracts for May delivery, the global benchmark, were last seen $2.72, or 9.5%, lower from their Tuesday close in New York and trading at $26.01 per barrel in early trading, the lowest since November 2003 a move that marks a 58.5% decline from its January 8 peak.
WTI contracts for April delivery, which are more tightly-linked to gasoline prices, were marked $4.06, or 15% lower at $22.89 per barrel, which is also around 60% lower from its early January top and the lowest since April 2002.
With the ongoing collapse in crude, consumer advocate GasBuddy is now forecasting June pump prices of around $2.03 per gallon, more than $1.70 lower than its prior forecast and the lowest in at least four years.
"There is a pre-coronavirus level for oil demand, and a post-coronavirus level of demand," GasBuddy said in a blogpost. "Demand for oil will be at multi-decade lows for a better part of 2020, which means gas prices will be some of the lowest we’ve experienced in a while."
Oil prices were further pressured Wednesday by a surge in the U.S. dollar, which hit a three-year high of 101.02 against a basket of six global currencies, and reports that Saudi Arabia has ordered producers at the state-controlled Aramco to pump as much as 12.3 million barrels of crude each day next month as it ramps up its price war with Russia.
ExxonMobil XOM shares, which have fallen more than 50% so far this year. were marked 7% lower at $34.23 each while rival Chevron Corp. CVX was seen 12.8% lower at $61.80 each, extending its year-to-date decline to 48.8%.