Brent Crude Oil — the international benchmark oil price — fell to $21.76 (£17.68) at one point yesterday, the lowest since 2002.
The US oil benchmark, West Texas Intermediate, fell below $20 a barrel, $19.85 (£16.13), after it lost more than 7 per cent yesterday morning.
Both benchmarks have rallied slightly since, with Brent Crude up to $22.71 a barrel (£18.45) while WTI has crept up to $20.28 (£16.48) as at this morning.
The global oil industry is facing a sharp drop in demand as countries across the globe are on lockdown to tackle the coronavirus crisis, limiting both domestic and international travel.
The dwindling demand has been matched with an excess of supply from the price war between Saudi Arabia and Russia.
Earlier this month, Russia broke its partnership with Opec, prompting Saudi Arabia to launch an aggressive price war targeting the rival producer.
Saudi Arabia has since increased production and offered its oil at a big discount to win new customers just as the coronavirus outbreak hit demand.
The price of oil has been on a decline since the start of the year, tumbling 66 per cent since January 1.
Markets have been resilient to the latest oil price dip, with the FTSE 100 — which is exposed to oil stocks — up nearly 1 per cent yesterday and rising 2.2 per cent since markets opened this morning. The S&P 500 closed up 3.35 per cent yesterday.
imogen.tew@ft.com
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