Coronavirus: Oil price collapses to lowest level for 18 years

The price of oil has sunk to levels not seen since 2002 as demand for crude collapses amid the coronavirus pandemic.

Brent crude fell to $23.03 a barrel at one point on Monday morning, its lowest level since November 2002.

Meanwhile the price of US West Texas Intermediate (WTI) fell below $20 a barrel and close to an 18-year low.

Oil prices have fallen by more than half during the past month as companies cut back or close production.

In addition to the drop in demand, a price war broke out earlier this month between Saudi Arabia and Russia.

This began when Saudi Arabia failed to convince Russia to back production cuts that had been agreed with the other members of the Opec oil producers’ group.

However, analysts said the collapse in demand from the measures taken to counter the spread of coronavirus was now the main factor.

“Opec, Saudi Arabia and Russia could mend their differences, but there’s not that much Opec could do…. the demand shock from Covid-19 is just too big,” Lachlan Shaw, National Australia Bank’s head of commodities research, told Reuters.

“The reality is global storages will fill up in a couple of months if nothing changes, and that will have all sorts of disruptive impacts on pricing.”