Oil prices dropped below $70 a barrel for the first time since April, having reached as high as $86 last month on the backs of trade fears and waning growth. Brent on Friday sat at $69.68, down 1.8%.
Expectations that US sanctions on Iran could take substantial crude volumes out of the market were mitigated by steadily increasing production out of Saudi Arabia, Russia, and the US. Those countries are now pumping at near-record levels, with figures suggesting the three are producing 33 million barrels a day, or a third of the world's oil.
"There is no slowing down the bear train," said Stephen Brennock, an analyst at the London brokerage PVM Oil. "Instead, the energy complex has extended a rout driven by swelling global supplies and a softening demand outlook."
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Markets Insiders Brent crude three-month chart. Markets Insider[/caption]The Financial Times on Fridayreportedmore crude oil could also be coming from Iraq, with a deal close between its federal government and the Kurdistan Regional Government to restart exports from the disputed territory of Kirkuk.
"In view of the latest price slump and the oversupply that looks set to materialize next year, the Organization of the Petroleum Exporting Countries is thinking about cutting back oil production," analysts at Commerzbank said in a note on Thursday.
US crude also dropped into a bear market Thursday as prices fell to $59.28. Selling intensified over the past week following the publication of figures from the US's Energy Information Administration that showed US oil inventories were at a five-month high. Temporary waivers on importing Iranian crude were taken by several countries, but these will expire in six months.
All eyes will now be on this weekend's summit in Abu Dhabi, United Arab Emirates, where members of the OPEC cartel of oil producers will determine whether to cut production.
