A collapse in the price of oil continued to disrupt world markets as investors on Tuesday braced for another deep dive in U.S. stocks.

Global benchmark Brent crude fell nearly 17 percent, one day after the U.S. benchmark fell below zero for the first time in history. Brent crude was trading at $21.35 a barrel Tuesday after briefly falling below $20 for the first time in nearly two decades. The collapse was weighing on global stock markets, with Wall Street signaling big losses at Tuesday’s open.

Dow Jones industrial average plunged 500 points, about 2 percent, at the open. The broader Standard & Poor’s 500 dropped about 1.7 percent and tech-heavy Nasdaq fell roughly 1 percent. European markets were off significantly and Asian indexes in decline as uncertainty gripped investors, who are hungry for any sign of relief from the coronavirus pandemic’s economic stranglehold.

“The collapse in oil drives home the stark drop in economic activity around the world due to this virus,” said John Kilduff of Again Capital. “That puts a fine point on what we are staring down here.”

Analysts said nearly 40 million Saudi Arabian barrels are on their way to U.S. shores, adding to the tens of millions already in storage here. That delivery “is probably going to be the final dagger in the heart of the U.S. shale oil industry,” Kilduff said.

President Trump said the administration would move swiftly to shore up the sector.

“We will never let the great U.S. Oil & Gas Industry down,” he said in a Twitter post. “I have instructed the Secretary of Energy and Secretary of the Treasury to formulate a plan which will make funds available so that these very important companies and jobs will be secured long into the future!”

U.S. markets were in the midst of a busy earnings week that will test how companies are weathering the lockdown and how they are gauging the rest of the year. Lockheed Martin, Chipotle and Phillip Morris International were due to report earnings on Tuesday.

Dow component Coca-Cola gave some clues of what is coming; the beverage giant, reporting before the start of trading Tuesday, said it saw a big drop in worldwide sales in April as restaurants, ballparks, movie theaters and other live entertainment have closed. Still, first-quarter results beat expectations. And though the company anticipates a tough second quarter, it expects a pick up in the latter half of the year.

Oil was the story of the day Monday amid the historic collapse of West Texas Intermediate crude. Sellers holding contracts were paying would-be buyers to take the oil off their hands, an unprecedented move that has rippled through global oil and currency markets. With many businesses shuttered by public health orders and travel almost totally scrapped due to the coronavirus outbreak, crude inventories far outpace demand and have overwhelmed storage capacity.

May contracts for WTI were about to expire, forcing holders on the contracts to unload their oil at a loss. June WTI contracts, which accounts for future oil deliveries, were faring a bit better, selling at around $16. That remains far below the break-even mark for companies and most oil producing countries.

Most oil producers need an oil price at least in the $50 to $60 per barrel range, which allows them to make a profit. Oil prices have collapsed this year, with WTI dropping more than 100 percent based on Monday’s market.

WashingtonPost