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The nightmare in the oil industry keeps getting worse. It's now facing the weakest oil price since the first term of President George W. Bush.

Intensifying recession fears drove US oil prices down a staggering 24% Wednesday to $20.37 a barrel. That's the lowest level since February 2002.

Selling escalated throughout the day, with 9% morning losses more than doubling by the afternoon. The acceleration reflects a growing realization of just how much the coronavirus outbreak is slamming the world economy.

The relentless selling is being driven by a crushing combination of excess supply and shrinking demand. And it's dealing a crushing blow to America's once-booming oil industry.

The coronavirus pandemic has caused global travel to collapse, eating into the world's once-insatiable thirst for oil, which powers the economy. Countless flights have been cancelled. The cruise industry is at a standstill. Highways are empty. And many factories are dark.

"With each day there seems to be yet another trapdoor lying beneath oil prices," Louise Dickson, analyst at Rystad Energy, wrote in an emailed comment. "What we are seeing here is essentially the atomic bomb equivalent in the oil markets."

Demand is collapsing at breathtaking pace

With travel restrictions and quarantines accelerating, energy analysts are scrambling to downgrade their oil demand forecasts.

Jet fuel is the biggest problem, with airlines around the world scrapping flights and parking planes because of travel restrictions. Global commercial air traffic will drop by about 20% this year, Rystad predicted.

Against that dismal backdrop, analysts warn more selling is likely to come in the oil patch.

Goldman Sachs warned Tuesday evening of an "inevitable fall" in US oil prices to around $20 a barrel during the second quarter. That's well below the Wall Street bank's previous call for $29 oil.

One of the problems is that there is now so much oil around the world that it will be difficult to find places to put it all.

"We believe the velocity of the upcoming inventory builds is now certain to overwhelm the ability to fill storage," Damien Courvalin, head of energy research at Goldman Sachs, wrote to clients in a note.

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