NEW YORK: US oil nosedived below $11 a barrel Tuesday after a major exchange-traded fund started selling its short-term contracts of the commodity, and storage concerns mounted as the coronavirus strangles demand.
West Texas Intermediate, the American benchmark, for June delivery dropped 14.8 percent to $10.88 a barrel in Asian morning trade – a day after plunging 25 percent.
International benchmark Brent crude slipped 4.4 percent to trade at $19.10 a barrel.
Prices have plunged in recent weeks as demand for the commodity collapses owing to lockdowns and travel restrictions imposed worldwide to fight the virus.
Last week, US oil fell below zero for the first time as investors scrambled to offload it before the expiry of the May trading contract, but could not readily find buyers.
The latest fall was driven by the United States Oil Fund — a massive, oil-backed exchange-traded vehicle — saying it would sell all its holdings in the WTI contract for June delivery.