U.S. crude prices fell Friday for a 10th consecutive session, sinking U.S. crude futures deeper into bear market territory and wiping out the benchmark’s gains for the year.
The 10-day decline is the longest losing streak for U.S. crude since mid-1984, according to Refinitiv data.
Crude futures are poised for their fifth straight week of losses as growing output from key producers and a deteriorating outlook for oil demand deepen a sell-off spurred by October’s broader market plunge. The drop marks a stunning reversal from last month, when oil prices hit nearly four-year highs as the market braced for potential shortages once U.S. sanctions on Iran, OPEC’s third biggest oil producer, snapped back into place.
“The market’s not tight. I think there are windows where you could perceive it to be tight, and I think the markets got caught into that,” Christian Malek, head of EMEA oil and gas research at J.P. Morgan, told CNBC on Friday. “The reality is that we’re still in a world where we’re overproducing and we’ve got surplus.”
U.S. West Texas Intermediate crude fell 66 cents, or 1.1 percent, to $60.01 by 12:22 p.m. ET. The contract is now down nearly 1 percent this year. It fell as low $59.26 on Friday, its weakest level in nearly nine months.
WTI fell into a bear market in the previous session, tumbling more than 20 percent from a nearly four-year high last month at $76.90.
International benchmark Brent crude was trading 65 cents lower at $70, down 19 percent from its recent high. The contract touched a seven-month low at $69.13 on Friday.
Brent has fallen in nine of the last 10 sessions, but is still up almost 5 percent this year.
Oil prices spiked in early October on fears that U.S. sanctions on Iran would thin out global petroleum supplies. However, the Trump administration granted temporary sanctions exemptions to eight countries, allowing Iranian crude exports to continue and easing concern about undersupply.
Analysts now expect the loss of exports from Iran to be less severe than anticipated.
Meanwhile, the world’s top three producers, the United States, Russia and Saudi Arabia are also pumping at or near records. Other OPEC members and exporting nations are also turning on the taps.
Signs that OPEC and several other oil producers including Russia could soon cut output have not put a floor under the market.
About two dozen exporting nations began capping their output in 2017 in order to drain a global crude glut. The group agreed in June to restore some of that output, and producers with spare capacity have been pumping more oil since then.
However, Saudi Arabia and Russia are reportedly in talks to orchestrate another round of cuts.
A committee representing the alliance meets this weekend and could make a production recommendation to the wider group. Last month the Joint Ministerial Monitoring Committee said the group may need to change course and begin cutting production once again.
“This monitoring committee is important, but it looks like consensus is likely to build around what Russia and Saudi decide, and that gets institutionalized,” Malek said.