U.S. oil futures led losses after U.S. crude inventories rose to 518.6 million barrels in the week to April 17, near an all-time record of 535 million barrels set in 2017, while floating crude oil storage has hit an all-time high of 160 million barrels.
U.S. West Texas Intermediate futures fell $4.55, or 26.3%, to $12.75 a barrel.
Brent crude was down $2.32, or 10.60%, at $29.67 a barrel.
Oil futures marked their third straight week of losses last week – and have fallen for eight of the past nine – with Brent ending down 24% and WTI off around 7%.
“Rising inventories and weak demand are weighing heavily on sentiment,” ANZ analysts said.
Trading was extremely volatile last week, in an extension of the selling that has dominated trading since early March as demand collapsed 30% due to the pandemic.
Traders expect demand to fall short of supply for months due to the economic disruption caused by the pandemic. Investors will be watching this week for results from oil majors including Exxon Mobil , BP Plc and Royal Dutch Shell .
Producers may not be slashing output quickly or deeply enough to buoy prices, especially when global economic output is expected to contract by 2% this year, worse than the financial crisis.
Rig counts in the United States are down to the lowest since July 2016, while the total number of oil and gas rigs in Canada has fallen to the lowest since at least 2000, according to Baker Hughes data.
“The Permian Basin and New Mexico accounted for 62% of the shutdowns; an ominous sign considering this region has been one of the more prosperous in the U.S.,” ANZ said.
Kuwait and Azerbaijan are coordinating cuts, while Russia is set to reduce its western seaborne exports by half in May.
The Organization of the Petroleum Exporting Countries and its allies including Russia, a group known as OPEC+, pledged earlier this month to cut output by an unprecedented 9.7 million barrels per day in May and June.