New York-traded West Texas Intermediate, the benchmark for US crude, settled down $3.03, or 9.5 percent, at $28.70 per barrel on Monday. Brent, the London-traded global benchmark for oil, finished down $3.80, or 11 percent, at $30.05 per barrel.
Both WTI and Brent lost about 25 of their value last week, in the worst weekly drop for oil prices since the financial crisis.
"There has been a dizzying drop in world oil demand and a dramatic pivot in Saudi oil production policy. If this situation persists amidst a recession, it points to the possible buildup of the most extreme global oil supply surplus ever recorded," said Jim Burkhard, vice president and head of oil markets at energy consultancy IHS Markit.
Analysts have warned that a major glut was looming in oil as a shutdown of air, road and sea travel, along with many parts of the global economy, intersected with production hikes by Saudi Arabia, which is out to expand its market share.
IHS Markit warned on Monday that the global crude surplus could range from 800 million to 1.3 billion barrels in the first six months of 2020. Until now, the largest six-month global surplus since 2000 was from late 2015 to early 2016, when it was a cumulative 360 million barrels, it said.
It also cautioned that U.S. crude oil production, estimated at record highs above 13 barrels per day just last week, could fall by 2-4 million barrels per day over the next 18 months.
