Brent crude fell below the psychological threshold of $30 per barrel on Monday as global oil demand is kept low and the oil supply glut is rising as a result of coronavirus-related concerns.
The international benchmark fell to $29.55 per barrel on Monday at 1331 GMT for a 12.7% daily loss, to reach its lowest level since Jan. 26, 2016, according to official data.
American benchmark West Texas Intermediate (WTI) hit as low as $28.65 at the same time for a 9.7% daily decline to mark its lowest level since Feb. 12, 2016.
The novel coronavirus (Covid-19) that originated in China and spread rapidly throughout the world has triggered weak economic growth and low oil demand worldwide.
On the supply side, rising crude supply in the global oil market is also keeping a downward pressure on prices.
Saudi Arabia-led OPEC and Russia-spearheaded non-OPEC failed on March 6 to make deeper cuts in oil production levels to mitigate the negative impact of coronavirus on the oil market, sending prices to their lowest levels in four years.
Both countries announced last week that they are preparing to boost their crude oil production levels ushering in a price war.
The fight for larger market share is expected to increase the glut of supply and keep prices around $30-$40 per barrel until the end of second quarter this year.
By Ovunc Kutlu