US crude prices fell for a 10th straight day on Friday, the longest losing streak on record as more signs of rising output and supplies saw another day of selling in the oil market.
Traders were looking to a meeting Sunday of OPEC and non-OPEC producers (such as Russia) to discuss possible moves to restore the previous production cap of 1.8 million barrels a day (cut to one million barrels a day earlier this year)
West Texas Intermediate (WTI) had closed in a bear market on Thursday five weeks after hitting near four-year highs and Brent — the international benchmark — followed on Friday with a drop of more than 20% from its October peak.
WTI ended under $US60 a barrel in after-hours trading on Friday night for the first time in months at $US59.87 after settling at $US60.67 in regular trading and being down more than 2% in the session.
The price falls have come amid a rapid reassessment by traders as to the state of oil supplies which were supposed to be tight given the supposed tough sanctions on Iran by the Trump administration.
But higher production from the US, Russia and Saudi Arabia is now outweighing the start of US sanctions against Iranian exports that helped drive the price of Brent to a four-year high of more than $US86 a barrel in early October.
The rising fears of overproduction have seen WTI falling for 10 consecutive sessions, with prices down about 11%. Brent has fallen for nine of the last 10 trading sessions.
And it seems US production is bound to grow, judging by the latest weekly report from Baker Hughes on the number of active rigs looking for oil and gas. That jumped by 14 to 1,081 in the largest weekly rise since one of 15 rigs in May of this year.
That came the same week as US oil stocks rose for a seventh week and US production hit a provisional record high of 11.6 million barrels a day – jumping by more than 400,000 barrels in the past few weeks.
The US Energy Information Administration (EIA) lifted its forecast for 2018 daily production to an average of 10.9 million barrels per day in 2018, from the previous forecast of 10.7 million barrels.
The EIA also lifted its estimate for 2019 production to 12.1 million barrels a day from 11.8 million, while on the demand front the Paris-based International Energy Agency cut its global forecast for this year and 2019 in October, citing threats to economic growth.
