Global stocks fell on Tuesday as U.S. oil prices crashed back below zero as the coronavirus crisis wiped out global crude demand and sparked a vast supply glut.

In early trading, London's benchmark FTSE 100 index tumbled 1.7% to 5,713.70 points, Frankfurt's DAX erased 2.2% to 10,443.42 and the Paris CAC 40 also shed 2.4% to 4,420.53 compared with Monday's close.

Wall Street looked set for losses, with the futures contract for the S&P 500 down 0.6%, while the contract for the Dow industrials shed 1%.

Monday's plunge in oil, which saw some prices reach minus $40 a barrel, resulted from growing crude stockpiles and dwindling storage space as lockdowns to contain the spread of the novel coronavirus slashed global fuel use.

U.S. benchmark light sweet crude West Texas Intermediate (WTI) for May delivery had climbed back into positive territory during Asian trading after having closed at negative $37.63 in New York.

But it sank back below zero to stand at negative $4.51 per barrel as trading began in Europe, falling even further to negative $7.13 a barrel.

Meanwhile, the Saudi Tadawul stock market, the largest in the Arab world, opened down 2.1% and was 1.6% lower at the close, leading a dip on Gulf markets.

Energy giant Saudi Aramco dropped 2.0% to stay well below its listing price of 32 riyals ($8.5) per share.

The Dubai Financial Market dipped 3.3%, while its sister bourse in Abu Dhabi was down 2.7%. Qatar's bourse lost 1.4%.

In Kuwait, the Premier index slumped 2.6% while the All-Shares index was down 1.9% at the close.

The small Muscat bourse shed 1.2% while Bahrain stocks finished 0.4% lower.

In Asia, unconfirmed reports that North Korean leader Kim Jong Un was being treated after surgery put additional pressure on markets that have been already shaken by the worsened investor sentiment over plunging oil prices.

Tokyo’s benchmark Nikkei 225 Index dipped nearly 2% or 388.34 points, to close Tuesday at 19,280.78, while the broader Topix Index was down 1.15%, or 16.52 points, to 1,415.89.

The Hang Seng index in Hong Kong lost 2.2% to 23,793.55. South Korea’s Kospi slipped 1%, to 1,879.38.

Australia's S&P/ASX 200 fell 2.5% to 5,221.30 and the Shanghai Composite index gave up 0.9% to 2,827.01.

The tumult in the oil market mirrors volatility in many others and reflects uncertainty over where the world economy will head as governments begin to loosen controls imposed to contain the coronavirus.

"We could merely be in the eye of the hurricane as the epicenters of its rage remain centered around demand devastation and crude oil oversupply," Stephen Innes of AxiCorp. said in a commentary.

"At a minimum, oil prices will be the last asset class to recover from lockdown" and only when travel restrictions are lifted, he said.

When trading of contracts for U.S. oil to be delivered in May expire on Tuesday, the earliest delivery available will be for June.

On Tuesday, it was down 28 cents at $20.15 per barrel in electronic trading on the New York Mercantile Exchange.

Brent crude, the international standard, dropped $2.91 to $22.66. It fell nearly 9% on Monday to $25.57 per barrel.

"The historic drop in WTI prices is an indication of the downward pressure which many other crude oil grades could face, given the oversupply situation," Sushant Gupta of Wood Mackenzie said in a report.

On the bright side, given the very low prices right now, "It also provides an opportunity for large consuming nations in Asia such as China and India to expedite filling up their petroleum reserves."

Stocks have been on a general upward swing recently, buoyed by promises of massive aid for the economy and markets by the Federal Reserve and U.S. government.

More recently, countries around the world have tentatively eased up on business-shutdown restrictions meant to slow the spread of the virus, which has killed more than 170,000 people and infected more than 2.4 million.

Health experts warn the pandemic is far from over and new flareups could ignite if governments allow a premature rush to "normal" life. Many analysts also say some of the recent rallies for stocks are based on overly optimistic expectations for a fast economic rebound once shutdowns end.