U.S. oil prices dropped for a ninth consecutive session on Thursday, falling into a bear market, on further signs of growing supply even as data showed record Chinese oil imports.
Crude prices have plunged over the last five weeks, buffeted by October’s broader market slump, signs of deteriorating demand and rising output from key producers.
The decline continued earlier this week after the Trump administration announced it would issue waivers to eight countries, allowing them to continue importing Iranian crude for the next 180 days. The United States restored sanctions on Iran’s energy, banking and shipping industries on Monday.
“As a result, oil supplies are going to be higher than the market anticipated,” said Andrew Lipow, president of Lipow Oil Associates. “So it seems to me that the loss of Iranian supplies is only going to be between 1 and 1.2 million barrels per day, and the OPEC and non-OPEC producers have more than made up for that.”
U.S. West Texas Intermediate crude fell as low as $60.40 a barrel on Thursday, briefly wiping out its gains for the year. The contract settled $1, or 1.6 percent, lower at $60.67. That’s down 21 percent from last month’s four-year high of $76.90, putting WTI in bear market territory.
Brent crude fell $1.33, or 1.9 percent, to $70.74 a barrel at 2:30 p.m. ET. The international benchmark hit a session low of $70.60, tumbling 18.6 percent from its nearly four-year high of $86.74 on Oct. 3.
U.S. gasoline futures are also trading in bear market territory, down nearly 28 percent from their 52-week high.
Prices fell to a nearly eight-month low on Wednesday after the U.S. Energy Information Administration reported the seventh consecutive weekly increase in U.S. crude stockpiles.
U.S. output also hit an all-time high at 11.6 million barrels per day last week, according to preliminary figures released by the EIA. If confirmed during revisions, it would more firmly establish the United States as the world’s top oil producer.
The EIA forecast this week that U.S. oil production will average 12.1 million bpd in 2019, marking an upward revision from its last projection.
The other producers in the top three, Saudi Arabia and Russia, have been dialing up production since June.
“All three of them are continuing to pump at record levels, that’s been … part of what’s causing oil to move into a bear market,” Tamar Essner, director of energy and utilities at Nasdaq Corporate Solutions, told CNBC’s “Worldwide Exchange” on Thursday.
“I think the market is grappling with some fundamental uncertainties,” she said. “We don’t know if we are oversupplied or undersupplied.”