After falling into negative territory for the first time ever on Tuesday, US crude futures initially rose 20 percent as contracts for May delivery expired and the June contract became the front month.
But by 04:20 GMT in Asian trading, West Texas Intermediate was down 4.4 percent at $11.06 per barrel.
Brent crude, which settled down 24 percent in the previous session, was 14.5 percent lower at $16.53 per barrel after rising more than $1 earlier.
“it highlights that yesterday was not a one-day blip, but a problem that is going to need to be dealt with and priced in until US oil supply drops enough to eat into the supply glut, or demand recovers sufficiently to do the same,” Robert Carnell, Asia Pacific regional head of research said in a note.
Oil prices have slumped more than 70 percent this year as the coronavirus has slashed demand for everything from jet fuel to gasoline, while storage tanks around the globe are filling rapidly.
The volatility in the oil market has prompted CME Group, the world’s biggest commodities exchange, to raise margin requirements on crude oil futures. A trading margin is the percentage of a particular transaction that an investor has to pay for with his or her own cash, compared with the amount borrowed to make the purchase.
“Global markets are struggling mightily with a temporary but overwhelming demand drop due to the coronavirus pandemic,” said Stephen Innes, global markets strategist at AxiCorp, warning that prices could tumble further as storage fills up.
Giving some support to prices, the US Senate on Tuesday approved nearly $500bn in added support for the US economy and hospitals and will send the measure to the House of Representatives for final passage later this week.
The plunge in oil has dragged down stocks globally, with Asian equities slipping broadly on Wednesday. Japan’s Nikkei was down 0.77 percent while South Korea’s Kospi lost 1.4 percent.
In China, the Shanghai Composite declined 0.9 percent. Hong Kong’s Hang Seng Index lost 0.9 percent and Australia’s S&P/ASX 200 dropped 0.8 percent.
But US futures on the S&P 500 share index were up 0.3 percent in Tokyo after it plunged 3.1 percent on Tuesday along with other important US stock indexes.