NEW YORK – Oil prices fell more than one percent on Friday, with U.S. crude on track for its longest losing streak since 1984 as global supply increased and investors worried about the impact of lower economic growth and trade disputes on fuel demand.
Benchmark Brent crude fell below $70 a barrel for the first time since early April, and was down nearly 20 percent since reaching four-year highs at the beginning of October.
Brent crude futures fell 53 cents to $70.12 a barrel, a 0.8 percent loss. It was down about 3.7 percent for the week and more than 15 percent this quarter.
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.
WTI crude futures fell 48 cents to $60.19 a barrel, a 0.8 percent loss by 11:24 EST (1624 GMT), after dropping under $60 a barrel to its lowest in eight months.
The U.S. crude contract had hit a low of $59.26, down $1.41 and off more than 20 percent since its peak in October. That put it in “bear market” territory, borrowing a definition used in stock markets.
“What a difference a month makes,” said Michael Tran, commodity strategist at RBC Capital Markets.
“Market sentiment has shifted from the most bullish tone in years with many calling for $100 only weeks ago, to the weakest investor sentiment since the 2016 price trough”
Oil peaked in early October on concerns that U.S. 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.
But other big producers, such as Saudi Arabia, Russia and shale companies in the United States, have increased output steadily, more than compensating for lost Iranian barrels.
The United States, Russia and Saudi Arabia are pumping at or near record highs, producing more than 33 million barrels per day (bpd), a third of the world’s oil.
Inventories in Cushing, Oklahoma, the delivery point for U.S. crude futures, have risen for seven straight weeks amid refinery maintenance and increased pipeline connections into the hub.
The U.S. sanctions on Iran, meanwhile, are unlikely to cut supply as much as expected. Washington has granted exemptions to Iran’s biggest buyers, allowing them to buy limited amounts of oil for at least another six months.
A South Korean delegation including oil buyers is expected to head to Iran next week to discuss resuming Iranian oil imports after a three-month halt, sources told Reuters.
China National Petroleum Corp said it was still taking oil from Iranian fields in which it has stakes.
Washington has said it wants to force Iranian oil exports down to zero, but Bernstein Energy now expects “Iranian exports will average 1.4 million to 1.5 million bpd” during the exemption period, about half the volume in mid-2018.
“As OPEC exports continue to rise, inventories continue to build, which is putting downward pressure on oil prices,” Bernstein said. “A slowdown in the global economy remains the key downside risk to oil.”
Still, a return to oil production cuts by OPEC and its allies next year cannot be ruled out, two OPEC sources said this week, to avert a possible supply glut.
A ministerial committee of some OPEC members and allies meets on Sunday in Abu Dhabi to discuss the market and outlook for 2019.