As the production cut agreed by major oil producers failed to lift the energy market, the new crisis of the commodity's storage has come up and on account of it, the commodity has drifted to its two-decade low.
Futures were dragged by over 8% in early Asian trade to below $17 per barrel after they lost almost 20% of their value as the historic deal failed to bring respite to the struggling oil markets.
The US benchmark WTI is trading at steep discount as there are concerns lingering that its storage facility Cushing, Oklahoma will be filled to its full capacity.
"The output cut that we've seen, or supposed to see coming, isn't sufficient to cover the 25 million to 30 million barrels of daily demand that's being destroyed by Covid-19," said David Lennox, resource analyst at Fat Prophets in Sydney. "We have to see a peak for Covid-19 globally to get a clearer picture of how much demand will be destroyed."