A floorhand works on an oil rig in the Bakken shale formation outside Watford City, North Dakota. Getty Images

Oil dropped 24% to a more than 18-year low on Wednesday as the coronavirus pandemic continues to sap demand for crude, and as rising worries about a global recession lead to fears of longer-term demand destruction. U.S. West Texas Intermediate crude fell 24.4%, or $6.58, to settle at $20.37 per barrel, its lowest level since Feb. 2002. At the low of the day, the contract hit $20.06. It was WTI's third worst day on record.

International benchmark Brent crude shed 14.1%, or $4.07, to trade at $24.67, its lowest level since 2003. Oil is getting hit on both the supply and demand side. A slowdown in worldwide travel and business activity is weighing on demand, just as powerhouse producers Saudi Arabia and Russia prepare to ramp up production. "The oil market is about to flood with surplus barrels," Bank of America said in a note to clients Wednesday.

How low can prices go?

As demand grinds to a halt, the OPEC+ production cuts currently in place expire at the end of the month, meaning nations will soon be allowed to pump as much as they please. "With each day there seems to be yet another trapdoor lying beneath oil prices, and we expect to see prices continue to roil until a cost equilibrium is reached and production is shut in," said Rystad Energy analyst Louise Dickson. "This is the most dismal oil demand picture we have witnessed in a long time with a simultaneous collapse in jet fuel, gasoline, shipping fuel, petrochemicals, and oil used for power generation." WTI and Brent crude are on pace for their worst month ever, down 54% and 50%, respectively.

On Tuesday, Goldman Sachs slashed its oil forecast for the second quarter, now seeing WTI and Brent averaging $20 per barrel. The firm believes oil use has fallen by 8 million barrels per day. "Demand losses across the complex are now unprecedented," Jeffrey Currie, the firm's global head of commodities research, said in a note to clients. Unlike prior periods of economic turmoil, including the financial crisis in 2008, the long-term impact of coronavirus is still very much unknown. With more and more market watchers saying a recession looks likely, oil prices could have much further to fall. "Looking ahead, the path of least resistance is decidedly lower right now and the lower-for-longer dynamic appears to be one that is here to stay for a while, given the clearly bearish fundamentals pointing to a likely longstanding surplus in the global oil markets," said Tom Essaye, co-founder of The Sevens Report.

OPEC+ talks unwind