Oil benchmarks continued to drop early Wednesday following the prices turning negative for the first time in history on Monday.
U.S. benchmark West Texas Intermediate crude futures for June traded 4.2% lower at $11.09 at press time, dropping further from Tuesday's declines.
Brent crude futures for June traded 13.3% lower at $16.78, the lowest level it has hit since 1999.
The drop came as concerns over diminished demand and lack of storage for excess supply remain.
The novel coronavirus (COVID-19) pandemic has reduced the demand for oil worldwide as widespread lockdowns are imposed to curb the spread of the virus. Analysts are saying that it's short-term volatility.
The prices for September and onward futures remain above $30, signaling that the oil market could rebound strongly, DataTrek Research co-founder Nicholas Colas noted.
Others have expressed concerns that an end to the lockdown isn't yet in sight, and it could take much longer for the oil demand to rise again.
The Organization of Petroleum Exporting Countries and its allies recently agreed on production cuts after long negotiations, but analysts suggested it could be a case of too little, too late.
Rystad Energy Head of Analysis, Per Magnus Nysveen, told CNBC that the oil market is likely to see worse days going ahead.
"The world is running out of place to store the oil," Nysveen said.
"When the supply and demand balance is positive or negative, then you can build or draw from storage...but when the storage gets full, then there is no buffer for this very strong imbalance that we're seeing," he added.
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