The cost of Brent crude oil has hit its lowest level since November 2002 as financial markets eye deepening economic damage from the coronavirus crisis.
The price fell more than 5% overnight to hover just above $23 a barrel.
Market experts said it reflected concerns that demand would remain muted for longer as a growing number of countries globally enter lockdown conditions in a bid to slow COVID-19 infections – with the UK warning of likely restrictions for up to six months.
Donald Trump has also backtracked on his hope that the US could start to go back to work after the Easter holiday.
The oil price collapse is linked too to a bitter price war between major producers Russia and Saudi Arabia, following Moscow’s failure to back output cuts in support of prices – bolstering fears of a renewed supply glut.
At the same time, a sharp reverse on world stock markets has seen an estimated $15trn erased from values in the year to date.
Asian stocks were mostly lower on Monday – the Nikkei in Japan almost 4% lower at one stage – though Australia’s main index made tentative gains on the back of a AUS$130bn (£65bn) wage support package announced by the government.
A wave of stimulus from central banks and national governments has had only a limited effect on market confidence given the unprecedented nature of the crisis and uncertainty over its economic consequences.
The FTSE 100 in London – 27% down on where it started the year – was forecast to open flat on Monday.
Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said of the implied open: “The hesitation suggests that we may see a soothed volatility across the equity markets, although the energy-heavy FTSE 100 will likely remain under the shadow of a 5% drop in oil prices as a result of the cancellation of whatever was left from the Easter holiday plans.”