The current supply deal between OPEC and Russian Federation expires in March.
Other Middle East markets also fell as the new coronavirus affected global energy prices and Opec failed to make a production cut deal with Russian Federation.
And even with ample supply and low production costs, Saudi Arabia is not guaranteed to come out on top in a prolonged face-off with Russian Federation - especially if fears of a pandemic keep planes grounded and cars in driveways no matter how cheap crude oil gets.
The one hope for the longs/buyers is that the low for the day at $27.34 was able to stay above the January and February low prices from 2016 near the $26.05 a barrel area.
Stocks plummeted and investors rushed into safe-haven bonds Monday, as the worst one-day crash in crude oil prices in 30 years combined with ongoing coronavirus fears into a ideal storm that sparked a selloff dramatic enough to trigger a temporary curb on trading at the New York Stock Exchange.
For the most part, oil is a top income source for members of the Organization of the Petroleum Exporting Countries and such a dramatic fall in prices will put strain on their economies, some of which such as Iran and Venezuela, are already on the brink.
OPEC responded by removing all limits on its own production, prompting fear of a supply hike in a market already awash with crude.
On the agenda: a production cut of 1.5 million barrels a day, or about 1.5% of global production.
Oil prices and stock indexes were in freefall Sunday after Saudi Arabia announced a stunning discount in oil prices - of $6 to $8 per barrel - to its customers in Asia, the United States and Europe.
Recently, oil output more than doubled in New Mexico, generating more than $500m in proceeds from past auctions, and lifting it to become the third-largest USA producing state. Now, the oil price war that has erupted has U.S. shale oil companies rushing to cut spending and rein in their production.
The countries along with several other producers have cooperated for three years to restrain supply.
With global oil production now far outpacing demand, oil analyst Martjin Rats of Morgan Stanley said Opec members are now expected to pump more oil to capture market share.
"Good for the consumer, gasoline prices coming down!" - tweet Monday after the price of oil sank almost 20% and the stock market, already shaken by the coronavirus outbreak, took an even deeper dive.
Saudi Arabia's shock decision to increase crude production from next month after falling out with Russian Federation over how to deal with the impact of coronavirus on demand for oil, prompted the price of oil to crash on world markets on Monday. More than 110,000 people have been infected in 105 countries and territories and 3,800 have died, the vast majority in mainland China, according to a Reuters tally.
China, the world's second largest economy and biggest oil importer, has been in virtual shutdown since the beginning of the outbreak leading to a drastic reduction in demand.
"A blend of shocks have sent the markets into a frenzy on what may only be described as 'Black Monday, '" said Sebastien Clements, analyst at financial payments platform OFX.
Major banks also have cut their demand growth forecasts. Goldman sees a contraction of 150,000 bpd in global demand.
Bank of America reduced its Brent crude price forecast to$45 a barrel in 2020 from $54 a barrel.
Now, Saudi Arabia appears to have shifted gears.
After oil prices crashed more than 20% on Monday, energy firms have seen some of the biggest share price falls.
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