WTI Crude prices slipped on Thursday by more than 20 percent from the four-year high hit just last month, entering bear market territory, as oil production in the United States continues to grow, Russian Federation and Saudi Arabia put a lot more oil on the market, while the global economy and oil demand growth are starting to show signs of slowdown.
U.S. West Texas Intermediate crude futures were on track for the 10th straight day of declines, the longest such streak since July 1984, according to Refinitiv data.
However, oil markets were held back somewhat after the United States became the world's top crude producer as its output hit record levels.
Prices are now hovering around their lowest in about nine months.
"The market's not tight".More news: John Legend rips Trump, calls him a 'f------ embarrassment' on Twitter
Thanks to the high fiscal breakevens, JP Morgan believes Saudi Arabia would try to keep oil price supported closer to $80/bbl.
That has not started yet: indeed, during October, Chinese crude imports hit an all-time high amid indications that the country's manufacturers were stepping up production ahead of United States tariffs kicking in.
Brent crude (LCOc1) futures fell 59 cents to $70.06 a barrel, a 0.8 percent loss by 12:20 EST (1720 GMT). It fell as low $59.28 on Friday, its weakest level in almost nine months.
Oil neared three-month lows on Thursday, surrendering early gains as investors focused on global crude supply, which is increasing more quickly than many had expected.
Brent crude, the European benchmark, is not quite there yet: it reached a peak of $86.29 on the same day and, earlier today, was trading at $69.99 at one point, representing a fall of just under 19%.More news: Helicopter tragedy will haunt me forever, Leicester’s Schmeichel says
Oil peaked in early October on concerns that USA sanctions on Iran that came into force this week would deprive the oil market of substantial volumes of crude, draining inventories and bringing shortages in some regions.
Mr. Pompeo has urged the exempted countries to reduce their energy import from Iran, but the Indian spokesperson did not provide any indication on this subject.
"This also came at a time where the U.S., Russian Federation and Saudi Arabia had been boosting oil to record levels", McQueen added. Other producers, including Brazil and Iraq, have also boosted their production levels during the last six months.
Signs that OPEC and several other oil producers including Russian Federation could soon cut output have not put a floor under the market. The group agreed in June to restore some of that output, and producers with spare capacity have been pumping more oil since then.
Producers including Saudi Arabia and Russian Federation had opened the taps earlier this year following unprecedented political pressure from Trump. "The global supply and demand balance does not look very tight next year".More news: Accusation that Democrats hacked Georgia voter file is "outrageous", cyber expert says
"This monitoring committee is important, but it looks like consensus is likely to build around what Russian Federation and Saudi decide, and that gets institutionalized", Malek said.