US oil nosedived towards $10 a barrel Tuesday after a major exchange-traded fund started selling its short-term contracts of the commodity, and storage concerns mounted as the coronavirus strangled demand.
In morning London deals, West Texas Intermediate crude for June delivery tumbled more than 21 percent to $10.07 — having plunged 25 percent a day earlier.
International benchmark Brent crude slid 4.9 percent to trade at $19.01 a barrel.
The latest market drop was driven by the United States Oil Fund — a massive, oil-backed exchange-traded fund (ETF) — saying it would sell all its holdings in the contract for June delivery.
By investing in longer-dated contacts, the fund’s move put pressure on the June contract, analysts said.
