Brent crude, the world's oil benchmark, tumbled as much as $2.91 or 11.67% and fell to $22.02 a barrel in a single trading session at London ICE Futures Exchange on Monday.
At the same time, WTI light crude price decreased by 5.86% and fell to $20.25 a barrel at New York Stock Exchange (NYSE).
Since the start of March, the prices of both benchmark oil grades have decreased by 50%.
The oil market is “facing an unprecedented set of conditions. Demand has never fallen this much or this quickly, and storage capacity is going to be increasingly overwhelmed,” said Robbie Fraser, senior commodity analyst at Schneider Electric.
In a Bank of America global research report, the investment bank forecast the Brent price would average $37 a barrel this year and $45 a barrel next year. The bank also expects the WTI price would average $32 a barrel this year and $42 next year.
“On a quarterly basis, we expect to see the steepest decline in global oil consumption ever recorded,” BofA analysts said, adding that the they expect 12 million barrels per day drop in the second quarter of 2020 and 4.5 million barrels per day contraction for the year.
According to OilPrice.com website, unprofitable drilling, a global recession and dwindling access to capital could lead to a decline in U.S. natural gas production this year and next. The declines could finally set the stage for an increase in prices in 2021.