US oil WTI slips below $15 a barrel on storage worries, low demand due to coronavirus

US oil prices fell heavily on Monday and slipped below $15 a barrel on renewed storage concerns as the coronavirus throttles demand, even as producers start slashing output to boost markets.

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American benchmark West Texas Intermediate dropped 15 percent to $14.39 a barrel in Asian afternoon trade, reversing direction after several days of gains last week.

Brent crude, the international benchmark, was off nearly six percent at $20.16 a barrel.

Oil prices have collapsed in recent weeks as demand evaporated because of lockdowns and travel restrictions imposed worldwide to fight the virus.

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Last week, US oil fell below zero for the first time as investors scrambled to offload it before the expiry of a trading contract, but could not readily find buyers.

Prices have recovered since, but remain at their lowest levels for years.

A key worry for traders is that storage facilities -- particularly in the United States -- cannot cope with the oversupply.

"Concerns surrounding rising global inventories, especially in the US with the coronavirus pandemic weighing on gasoline consumption, are pressuring oil prices," said Kim Kwangrae, a commodities analyst at Samsung Futures Inc.

The oversupply could test storage capacity limits in three to four weeks as tanks fill up, Goldman Sachs warned in a report.

The continued concerns about storage overshadowed signs that some countries -- including Kuwait and Algeria -- are starting to slash production in line with a major agreement hammered out this month.

Top producers have agreed to reduce output by 10 million barrels a day from May to shore up markets, a deal that marked an end to a price war between Russia and Saudi Arabia.