NEW YORK—A bar­rel of oil now costs less than a cheap bot­tle of wine.

Oil prices crum­pled even fur­ther yes­ter­day, and US stocks sank to their worst loss in weeks as wor­ries swept mar­kets world­wide about the eco­nom­ic car­nage caused by the coro­n­avirus pan­dem­ic.

US bench­mark crude was trad­ing as low as $6.50 a bar­rel yes­ter­day, more than 80 per cent low­er than the start of the year.

The dizzy­ing drop re­flect­ed stark suf­fer­ing in the glob­al econ­o­my that has left vast­ly di­min­ished de­mand for oil.

There’s lit­tle mys­tery around the sharp drop-off: Ef­forts to lim­it the spread of the coro­n­avirus have ma­jor cities around the world on lock­down, air trav­el has been se­ri­ous­ly cur­tailed and mil­lions of peo­ple are work­ing from home, lead­ing to far few­er com­muters on the roads.

The mar­ket’s spot­light was again on oil, where prices have plum­met­ed be­cause very few peo­ple are fly­ing or dri­ving and fac­to­ries have shut amid wide­spread stay-at-home or­ders.

Glob­al de­mand is set to drop to lev­els last seen in the mid-1990s.

At the same time, oil pro­duc­ers can’t slow their pro­duc­tion fast enough and all the ex­tra crude means stor­age tanks are quick­ly run­ning out of room.

The cost for a bar­rel of US oil to be de­liv­ered in June plunged 43 per cent to $11.57. That’s the part of the mar­ket that oil traders are fo­cused on and trad­ing most ac­tive­ly.

For oil to be de­liv­ered next month, which is when stor­age tanks could top out, the cost of a bar­rel stood at $10.01.

A day ear­li­er, it fell be­low ze­ro for the first time, mean­ing traders paid oth­ers to take oil off their hands to get rid of the headache of find­ing where to store it.

An­a­lysts con­sid­er prices for US oil to be de­liv­ered in June and lat­er as clos­er to the “true” price of crude, along with prices for in­ter­na­tion­al oils.

They did not drop be­low ze­ro, in part be­cause the stor­age is­sues aren’t as press­ing for them. But they al­so slid yes­ter­day on the same con­cern: A glob­al econ­o­my in­ca­pac­i­tat­ed by the virus out­break doesn’t need to burn as much fu­el.

Brent crude, the in­ter­na­tion­al stan­dard, for de­liv­ery in June lost 24.4 per cent to $19.33 per bar­rel.

“I don’t think there’s enough time even be­fore the June con­tract to solve the stor­age ca­pac­i­ty is­sue, so you see the June con­tract com­ing down sharply,” said David Joy, chief mar­ket strate­gist at Ameriprise Fi­nan­cial. (AP)