Hong Kong: Both main oil contracts struggled to maintain early gains Wednesday following another painful rout, while equity traders continued their flight to safety for a third day to extend a global sell-off.
With demand virtually non-existent owing to virus lockdowns, and production still high despite storage at bursting point, crude markets have been sent into freefall with WTI for May delivery diving to minus $40 on Monday.
Focus has turned to the June contract, which was faring slightly better but still lost almost half its value on Tuesday, while Brent collapsed by a fifth.
In early trade on Wednesday, WTI bounced 20 percent but was unable to maintain all the gains, while Brent went into reverse.
The crisis in the oil market caused by coronavirus was compounded by a price war between Russia and Saudi Arabia, but while they drew a line under the row and joined other key producers in slashing output by 10 million barrels a day, that has not been enough.
Crude's rout "merely reflects the underlying theme that there is no demand for physical oil, and there is nowhere to store it", said AxiCorp's Stephen Innes.
"Disappointment following the new (oil cut) agreement continues to resonate, and responding to that outcry could be the one thing that turns the oil price around in the near term, absent evidence of demand recovery."
Equity markets, buoyed in recent weeks by trillions of dollars of stimulus and signs of a slowdown in the global rate of virus infection and death -- and moves to slowly ease lockdown measures in some countries -- are beginning to feel the spillover from the crude collapse....