Brent crude futures declined more than 10 percent on Tuesday to $22.96 a barrel, while the May contract for US-based West Texas Intermediate (WTI) closed at a negative $37.63 on Monday - something that has not happened since oil futures began trading in 1983. The benchmark contract at one point touched a record-breaking low of negative $40.32 a barrel.
The most active contract, for June delivery, tumbled more than 31 percent lower during morning deals on Tuesday, falling to $13.97 per barrel.
As of press time on Tuesday, China's crude oil futures were being traded at 229.2 yuan ($32.43) per barrel, down 4.78 percent from Monday.
"The price dive this time is related to sluggish market demand caused by the COVID-19 pandemic. Once the virus is brought under control, the oil price will recover, but it will take a longer time for the price to return to $40 per barrel," said Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University.
Lin told the Global Times on Tuesday that China's retail fuel prices are likely to remain unchanged until year-end since there is no room to reduce them, based on the domestic oil price adjustment mechanism.
China has set a floor for retail prices at $40 per barrel.
In March, the National Development and Reform Commission, the economic planner, cut the retail ceiling prices for gasoline by 1,015 yuan per ton and diesel by 975 yuan, the biggest reduction since China launched the pricing mechanism in 2013.
"It's a good time for China to buy more energy based on low world prices, however, the window is relatively narrow and the globe is now facing the same problem - a storage of storage tanks," Lin noted.
Global energy giants including BP and Total are all scaling up their crude oil reserves taking advantage of the low prices.
As a national energy hub, the free trade area of East China's Zhejiang Province has nearly 6,000 enterprises in the oil and gas sector, with their possessing storage capacity at 31 million cubic meters.
Storage facilities for both refined oil products and crude oil are full, news site cnstock.com reported.
On the downside, the oil price slump could exacerbate the financial woes of major oil producers, including the "big three," observers said. The price slump will affect Chinese oil giant PetroChina more than the two other state-owned oil players - Sinopec and CNOOC - as it sits at the upstream of the industry chain, according to Lin.
Jin Lei, an associate professor at the Beijing-based China University of Petroleum, told the Global Times: "This is a big blow for domestic oil majors. The cost of producing [in China] is much higher than importing from abroad. Producing a barrel of oil at the current stage only incurs massive losses."
Peng Huagang, an official from the State-owned Assets Supervision and Administration Commission of the State Council, said at a press briefing on Monday that the plummeting oil price has squeezed the profits of some centrally administrated state-owned enterprises, so China's oil companies all saw losses in the first quarter.
"Demand at home dwindled in the first quarter, which cut sales of refined products by 20 percent. The costs of oil exploration and refining also exceeded revenues, which resulted in across-the-board losses," Peng explained.
Dai Houliang, chairman and secretary of the Party group of China National Petroleum Corp (CNPC), the controlling shareholder of PetroChina, said in a meeting on Tuesday that the low oil price has made the company's situation - big yet not strong - more prudent, calling for the acceleration of deep reform.
"As the difficult situation will last for a long time, challenges and difficulties should be evaluated more thoroughly and relevant measures should be considered fully," Dai said.
The convergence of two black-swan events - the outbreak of the coronavirus and the collapse of global oil prices - has hit both the supply and demand sides of the oil and natural gas markets, and the company's operations are under unprecedented stress, Dai said in an earlier meeting.
Sinopec said in a recent mobilization meeting that it will address the low oil prices with high-efficiency exploration, low costs and innovation in a bid to achieve sustainable development.
In the first quarter, China's crude oil imports rose 5 percent to 127.19 million tons, customs data showed, marking one of the few bright spots in the global industry chain, observers said.
China is buying a record 1.6 million tons of Russian oil for loading at sea during the four weeks that began on March 25, taking advantage of rock bottom prices for Russia's flagship Urals grade combined with a collapse in demand in Europe, Reuters reported.
First-quarter domestic oil output rose 2.4 percent to 48.57 million tons, while natural gas output reached 48.3 billion cubic meters, up 9.1 percent year-on-year, data from the National Bureau of Statistics showed.
This article is published in cooperation with the Global Times outlet.