Oil prices hit a 17-year low Monday after extending losses in Asian trade with the coronavirus pandemic and the vicious price war between Saudi Arabia and Russia filling the market with cheap oil and helping countries to fill up their oil storages.

U.S. benchmark West Texas Intermediate fell 5.3% to trade at $20 a barrel, while international benchmark Brent crude was off 6.5% at $23. The falls came after the death toll from the pandemic surged past 30,000 during the weekend as cases in hard-hit Europe and the U.S. showed no sign of letting up.

The plunge in consumption due to the coronavirus pandemic and national lockdowns has pushed markets into disarray for weeks. The International Energy Agency (IEA) estimated that the global consumption of oil has reduced from 100 million barrels per day to 80 million barrels.

The demand shock was only exacerbated by the dramatic rise in supply that took place after top producers Saudi Arabia and Russia engaged in a price war following a row about whether to cut output to support prices.

At the end of last week, Riyadh said it had not been in touch with Moscow about potential output cuts while Russia's deputy energy minister said oil at $25 a barrel was not a catastrophe for the country's producers – signaling the two sides are still far apart.

"Demand concerns are critical but well known, what really took the market down were the signals we got from Saudi Arabia and Russia that they intend to continue their current path," Vivek Dhar, a commodities analyst at the Commonwealth Bank of Australia, told Bloomberg News.

"Market hopes of a deal have come undone."

There are fears the commodity could fall further as storage tanks around the globe approach full capacity.

"When the storage capacity is filled, we should probably expect a response from Saudi Arabia, Russia, and other essential oil producers," AxiCorp's Stephen Innes said, though he warned, "the longer their response takes, the higher the risk of another steep decline in oil prices.”

John Kemp, in his column for Reuters Friday, said global petroleum stocks could be currently rising by about 10% a month at present, which would fill all available storage rapidly.

“If the economic downturn and volume war persists, the industry will eventually fill all available tank space, resulting in exceptionally steep discounts for nearby futures contracts,” he wrote.

Kemp said he expected nearby prices to fall so low “they will no longer cover basic operating and lifting costs for some wells, forcing them to be shut down and in some cases abandoned.”

The extreme market volatility, which is expected to stay at least for the next few weeks, is also poised to bear long-term consequences for sovereign wealth funds of oil-producing countries.

On Saturday, JPMorgan strategist Nikolaos Panigirtzoglou said he expected that oil-producing states in the Middle East and Africa could dump up to $225 billion in equities.

He said his estimates are based on data from sovereign wealth funds and figures from the Sovereign Wealth Fund Institute, a research group.

Around $100 billion-$150 billion in stocks have likely been offloaded by oil-producer sovereign wealth funds, excluding Norway's fund, in recent weeks, Panigirtzoglou said, and a further $50 billion-$75 billion will likely be sold in the coming months.

"It makes sense for sovereign funds to frontload their selling, as you don't want to be selling your assets at a later stage when it is more likely to have distressed valuations," he said.

A source at an oil-based sovereign fund said it had been gradually raising its liquidity position since oil prices began drifting lower from their most recent peak above $70 a barrel in October 2018.

In addition to the cash reserves, additional liquidity was typically drawn firstly from short-term money market instruments like treasury bills and then from passively invested equity as a last resort, the source said.