U.S. oil prices traded in bear market territory intraday Thursday, with prices declining for a ninth straight session on worries over rising U.S. crude oil inventories and concerns of a global supply surplus that could overwhelm demand.
The market entered an intraday bear market when prices fell below $61.13 a barrel, dropping as low as $60.83 a barrel. Prices have since moved back slightly above the bear-market level. Light, sweet crude for December delivery was recently 0.5% lower at $61.32 a barrel on the New York Mercantile Exchange. Brent crude was down 0.9% at $71.45 a barrel.
Bear Market: A bear market generally is defined as a 20% decline from a recent peak, which in the case of the U.S. crude oil benchmark was a four-year high of around $76 a barrel reached on Oct. 3. Prices have fallen steadily since then, fueled by a U.S.
government decision to soften oil sanctions on Iran. The market entered an intraday bear market Thursday morning in New York, when prices fell below $61.13 a barrel. Crude has closed lower for the past eight sessions through Wednesday, which is the longest losing streak since July 2014, when the yearslong oil downturn was just beginning.
EIA Data: One of the key factors in oil’s decline this week was the Energy Information Administration’s weekly inventory report released Wednesday. It showed that U.S. oil inventories rose for a seventh straight week to 432 million barrels, the most since June, and that crude oil production in the U.S. reached a record high. “The weekly EIA data release painted a rather bearish picture,” said JBC Energy. “Production rose to a fresh record high of 11.6 million barrels a day, up a massive 400,000 b/d week-on-week, while crude stocks built by almost 6 million barrels.”
OPEC:Members of the Organization of the Petroleum Exporting Countries meet this weekend to discuss market fundamentals and possibly consider a cut to production levels to boost falling prices. “In view of the latest price slump and the oversupply that looks set to materialize next year, OPEC is thinking about cutting back oil production,” Commerzbank said in a note. Russia, along with OPEC nations led by Saudi Arabia, has been pumping more oil since the summer to offset the loss of Iranian barrels, which now looks likely to be smaller than was anticipated due to waivers granted to some buyers. Oil prices have fallen by around 14% over the past month.
AHEAD: Baker Hughes is set to release its weekly rig-count report Friday that details U.S. drilling activity.
OPEC Joint Ministerial Monitoring Committee meets on Sunday in Abu Dhabi.