A barrel of Brent crude could soon cost less than a Café Latte unless exporters agree to make further deep cuts in output to help offset the devastating impact of the coronavirus experts have warned.

Rystad Energy said the massive drop in demand caused by the coronavirus could mean supplies run so far ahead of what is needed that prices fall to unprecedented levels.

North Sea at 'breaking point' as oil price turns negative in US

“Don’t be surprised if a barrel of oil gets cheaper than a latte in a while,” said the consultancy’s Bjornar Tonhaugen.

With Lattes selling for around £2.50 the comments will spark concern in the North Sea.

Industry leaders have said the slump in the crude price this year has left the North Sea at breaking point.

The Brent crude price fell below the key $20 (£16.20) per barrel level on Tuesday. This was the first time it had fallen so low in 18 years.Brent fetched $70/bbl in January.

On Monday the price for West Texas Intermediate crude fell into negative territory for the first time ever, meaning traders had to pay people to take oil off their hands.

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The problems caused by the fall in demand this year have been exacerbated in the US by a relative shortage of storage capacity for the oil produced from shale fields onshore.

Brent can be shipped more easily.

However, Mr Tonhaugen said the capacity to store Brent could be exhausted unless the supply demand imbalance is addressed.

This might require major exporters such as Saudi Arabia to agree to further significant output reductions, after committing to a historic programme of cuts earlier this month.

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Millions of barrels worth of daily production might need to be shut in.

Mr Tonhuagen said demand would likely only increase sufficiently if countries around the world eased coronavirus-related restrictions sooner than expected.

Brent crude sold for $20.25/bbl yesterday afternoon, up $0.92/bbl on the day.

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