Crude oil prices declined sharply on Monday amid escalating concerns about outlook for energy demand after rising fears about the coronavirus outbreak prompted governments to impose travel restrictions.
With the U.S. government and more countries across Europe coming out with travel restrictions, and airlines slashing services, it is feared the demand for energy will see a substantial drop in the near to medium term.
Global central banks, led by the Federal Reserve, have slashed interest rates and announced monetary easing measures including asset purchase programs, but worries about the economic impact of the fast-spreading coronavirus have not subsided a wee bit.
Weak industrial production and retail sales data out of China have added to the woes.
West Texas Intermediate Crude oil futures for April ended down $3.03, or about 9.6%, at $28.70 a barrel, not far off the day's low of $28.03 a barrel.
Brent Crude futures tumbled $3.80, or 11.2%, to $30.05 a barrel, after hitting a low of $29.52, the lowest level since January 2016.
On Friday, WTI crude oil futures for April ended up $0.23, or 0.7%, at $31.73 a barrel. Oil futures shed about 22% last week.
Official data from China showed industrial production and retail sales in the world's second largest economy plunged more-than-expected at the start of the year amid a widespread shutdown of manufacturing operations.
Industrial production plunged 13.5% in January to February period after rising 6.9% in December, the National Bureau of Statistics said. Economists had forecast a moderate 3% decrease.
Retail sales logged a sharp fall of 20.5%, reversing an 8% increase in December. Sales were forecast to drop only 4%.
Oil prices tumbled today despite comments from the U.S. President Donald Trump on Friday that the Department of Energy would purchase crude oil for the SPR in a bid to prop up prices.
"Based on the price of oil, I've also instructed the secretary of Energy to purchase at a very good price large quantities of crude oil for storage in the U.S. strategic reserve," Trump said Friday when he declared a state of emergency due to the coronavirus outbreak.