Just before 1200 GMT, the US benchmark West Texas Intermediate (WTI) crude for May delivery tanked to $11.04 – the lowest level since 1998, AFP reported.
Trade, however, was also technically driven as investors closed out their positions ahead of the May contract expiry Monday. The June contract was down 11.9 percent at $22.06.
The European benchmark contract, London Brent North Sea oil for June delivery, was down 6.1 percent at $26.38 per barrel.
Signs that the coronavirus may have peaked in Europe and the United States failed to lift Asian and European financial markets generally.
Traders are instead becoming more and more concerned that oil storage facilities are reaching their limits, as stockpiles continue to build owing to the crash in demand caused by the COVID-19 pandemic.
Analysts said this month's agreement between OPEC and its peers to slash output by 10 million barrels a day was having little impact because of the virus lockdowns and travel restrictions that are keeping billions of people at home.
WTI was hit particularly hard as its main US storage facilities in Cushing, Oklahoma, were filling up, with Trifecta Consultants analyst Sukrit Vijayakar saying refineries were not processing crude fast enough.
There are also plenty of supplies from the Middle East with no buyers as "freight costs are high", he said.
AxiCorp's Stephen Innes added: "It's a dump at all cost as no one... wants delivery of oil, with Cushing storage facilities filling by the minute.
"It hasn't taken long for the market to recognize that the OPEC+ deal will not, in its present form, be enough to balance oil markets."
Stock markets were mostly lower despite governments starting to consider how and when to ease the lockdowns that have crippled the global economy.
Shanghai, Mumbai and Bangkok rose while London, Paris and Frankfurt edged up in early trade.
But most other markets were in retreat.
Hong Kong was flat, while Tokyo fell more then one percent as Japan struggles to contain the disease, while Sydney shed 2.5 percent. Seoul dropped 0.8 percent and Manila dropped one percent. There were also losses in Taipei, Singapore, Wellington and Jakarta.
"The longer investors have to contemplate future economic issues while they wait for more countries to be on the downward slope of the pandemic curve, the more scope there is of risk assets pricing in a difficult future," Chris Iggo, of AXA Investment Managers UK, said.