US oil futures plunged 11% to $ 10.26 a barrel, reversing a rise during the first trading hours in Asia. They were down 3.3% to $ 11.16. The price of a barrel of West Texas Intermediate crude oil for June delivery was $ 11.57 on Tuesday, but fell to $ 6.50.
Crude oil Brent, the global benchmark, fell more than 16% to $ 16.60 a barrel on Wednesday, its lowest level in over 20 years – another sign of traders’ lack of confidence in the glut of supply .
The market is worried about the lack of oil poles to store barrels that no one wants, as the coronavirus pandemic is wiping out the demand for crude oil. While Saudi Arabia and Russia recently reached an agreement – with other producers – to reduce supply by a record amount, it did little to allay fears.
“Today’s sale has a capitulating look at it, after OPEC + tried to call communications last night, but without any signs of progress,” wrote Jeffrey Halley, senior market analyst for Asia – Specific to Oanda, in a research note.
Oil panic seems to spill over onto the stock market. Japan Nikkei (( and South Korea )Kospi (( Wednesday, down 1.6% and 0.6%. )
Hong Kong’s Hang Seng Index (( and China )Shanghai composite (( started the day down but rose 0.1% and 0.3%. )
Falling oil prices fill what Halley called a “surrogate role” which represents the extent to which the pandemic has slowed the global economy.
American equity futures struggled for hours during hours in Asia. Dow (( futures contracts edged up 0.1% for the last time as they attempted to break out of the red. )S&P 500 (( futures contracts increased 0.2%. )Nasdaq (( futures contracts increased 0.3%. )
On Wall Street, Chipotle (( and )Netflix (( released its first quarter results after the bell on Tuesday. Netflix has seen massive subscriber growth, exceeding its own expectations, with a whopping 16 million subscribers added. )
Subscriber earnings were fueled in part by home orders for coronavirus and popular Netflix releases such as the reality series “Love is Blind” and the documentary series “Tiger King”.
– Anneken Tappe and Frank Pallotta contributed to this report.