Oil prices hit 1990s low as coronavirus outbreak sinks demand

The viral outbreak has caused fuel demand to drop by roughly 30% worldwide and energy companies in the United States, the world's biggest producer, are scrambling to find storage for excess oil. "This is a direct result of excessive investment coinciding with a sudden demand shock in a landlocked area with limited storage and transportation," Goldman Sachs said in a report.

The volatility in the oil market has prompted CME Group, the world's biggest commodities exchange, to raise margins on crude oil futures.

The U.S. Senate on Tuesday approved nearly $500 billion in added support for the U.S. economy and hospitals and will send the measure to the House of Representatives for final passage later this week.

But there is concern globally that no amount of pump priming will be enough, with business executives preparing for a prolonged slump in demand and many of them worried that their companies won't survive.

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U.S. crude inventories rose by 13.2 million barrels in the week to April 17 to 500 million barrels, data from industry group the American Petroleum Institute showed on Tuesday. Analysts had expected a build of 13.1 million barrels. EIA/S

Official government data is due to be released on Wednesday.

"The U.S. oil system has been shattered by ... demand destruction never seen before," said Matt Stanley, a fuel broker at Star Fuels in Dubai.

The United States House of Representatives is set to vote on what would be the fourth coronavirus-response law. Taken together, the four measures amount to about $3 trillion in aid since last month to confront a crisis that has killed nearly 45,000 Americans.