U.S. futures on Friday looked to add to weekly losses, which pushed the commodity toward a 10th straight fall and into bear-market territory, as output increases fuelled concerns of surging supplies.
On Thursday, U.S. crude benchmark’s descended into a bear market, usually defined as a drop of at least 20% from a recent peak, ending its longest bull market since early 2015.
Most recently, West Texas Intermediate crude for December delivery CLZ8, -1.38% on the New York Mercantile Exchange was down 87 cents, or 1.4%, at $59.80 a barrel, after notching its lowest finish since March.
Read: The oil rout just became a bear market for U.S. crude
January Brent crude LCOF9, -1.16% also fell 95 cents, or 1.3%, to reach $69.75 a barrel on ICE Futures Europe. Brent oil was down more than 19% from its recent October peak and also flirting with a bear market.
For the week, WTI is set to drop 4.2% and mark its 10th consecutive decline, while Brent crude is poised for a 5.3% decline, according to FactSet data.
Looking ahead, investors will be awaiting data at 1 p.m. Eastern Time from Baker Hughes BHGE, -1.11% as a measure of the outlook for crude production. Last week, the number of active U.S. rigs drilling for oil edged down by 1 to 874 rigs, after rising for three weeks in a row.
That data will come after the Energy Information Administration on Wednesday said U.S. production climbed by 400,000 barrels a day to 11.6 million barrels a day for the week ended Nov. 2, in its weekly petroleum supply report.
The EIA report also revealed a seventh straight weekly rise in U.S. crude supplies, up 5.8 million barrels last week.
The weekly output data followed an updated forecast from the EIA released Tuesday, which raised the 2018 and 2019 outlooks on domestic crude production. For 2019, the government expects a production average of 12.06 million barrels a day.
Overall, crude output in Saudi Arabia, Russia and the U.S. had climbed ahead of U.S. sanctions on the Iranian energy sector, which were expected to contribute to tighter global oil supplies. The sanctions began earlier this week, but the U.S. granted eight countries temporary waivers—allowing them to continue buying Iranian oil.
Members of the Organization of the Petroleum Exporting Countries will meet in Abu Dhabi over the weekend ahead of a key meeting on Dec. 6 in Vienna. Meanwhile, Saudi Aramco CEO, Amin Nasser, is scheduled to meet in Moscow Friday to meet with his counterpart at Rosneft, Igor Sechin, among other top oil executives.
Iran sanctions had previously served to boost oil prices, with an October swoon serving as a reflection that increased output by Saudi Arabia and Russia would largely offset the lost barrels. The U.S. announcement of waivers only added to worries about oversupply.
“OPEC has been increasing production since the June OPEC meeting in an effort to make up for lost Iran barrels. Problem is, Iran barrels did not disappear under the Trump plan, despite all the bark about zero exports,” wrote Robert Yawger, director of energy at Mizuho USA, in a Friday report.
“So…OPEC production is super-sized, Iran barrels are still flowing. And EIA storage packs seven storage builds on top of an already oversupplied market! That is how you slide to correction territory in one month!” He wrote.
Saudi Arabia’s production rose to 10.67 million barrels a day in October, according to an S&P Global Platts survey Wednesday. That was the most in the 30-year history of the survey, which also showed that the OPEC’s October output edged down by 30,000 barrels to 33.04 million barrels a day.
Read: Saudi Arabia ponders a future without OPEC
Russia’s crude production rose to a post-Soviet record of 11.4 million barrels a day in October, according to Bloomberg.
On top of all of that, The Wall Street Journal, citing people familiar with the matter, wrote on Thursday that Saudi Arabia’s top government-funded think tank is studying the possible effects on oil markets of a breakup of OPEC.
The research project doesn’t reflect an active debate inside the government over whether to leave OPEC in the near term, WSJ wrote. However, the story has rattled some investors about the outlook of oil prices given that the cartel, led by swing-producer Saudi Arabia, has helped to set oil prices for the past six decades.
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