The Brent oil price dropped for the first time in seven months under the $ 70 brand per barrel and moved to the edge of the bear market.
Brent crude, a global benchmark, fell 1.6 percent to $ 69.55 a barrel on the ICE Futures stock exchange in London. At New York Mercantile Exchange, long-distance futures in Western Texas declined 1.7% to $ 59.67 per barrel.
The global benchmark was ready to join the WTI in the bear market after the US price on Thursday prolonged the four-year high in early October by more than 20%.
Bear markets are generally defined as a 20% drop from the market peak and Brent has recently declined by 19.2% from its own four-year high in October.
Oil-specific factors such as rising production and mitigation of Iran's oil-related sanctions against Iran have combined with wider market concerns about global economic growth and revenue growth, which in October led to a stock market failure,
ann heisenfelt / European Printing Agency
"Over the past few months, we have seen high production from OPEC – these supply concerns – and the emphasis has been on the global slowdown, especially in China," says Caroline Bain, chief economist at Capital Economics.
Sales have accelerated in the last few days by publishing Energy Information Administration figures showing oil reserves in the US in five months. Oil Organization Delegates will have this in mind when they meet non-OPEC members this weekend in Abu Dhabi.
Investors will be watching the OPEC + headlines carefully, as failures in reversing recent output outages are likely to exacerbate further price pressures, commented analysts at Commerzbank.
While a number of factors have been linked to rising oil sales, investors looking beyond short-term factors have a good reason to be optimistic about rising prices, analysts said.
Exceptions concerning the administration of Iraqi oil sanctions will be temporary and stock markets will stabilize. Moreover, communications from Saudi Arabia, which the Gulf countries can get into free production to bridge the gap lost by Iranian, Venezuelan and Libyan production, are exaggerated, as Harry Tchilinguirian, the global commodity markets strategy at BNP Paribas, says.
"While the short-term factors weigh sentiment, we do not think Saudi countries could cope with these countries and the demand for oil will increase seasonally, so it may be a good time to get into oil," said Mr. Tchilinguirian.
Complementing the pressure on commodities in the big Friday period was the recovery of the US dollar. The WSJ dollar index, which measures the US currency against the basket of 16 other people, grew by 0.2% when it reversed its losses in recent weeks and increased its year-on-year growth to 5.3%.
Dollar commodities, like oil, tend to become more expensive for other currencies when the dollar increases.
Attention was also focused on North American production, after a Montana judge ordered a construction on the Keystone XL pipeline.
The Nymex reformulated gasoline mixer – benchmark petrol contract – fell 0.19% to $ 1.64 per gallon. ICE gasoil changed hands to $ 650.75 per metric ton, down 2.8%.
Write David Hodari at [email protected]
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WTI is out of 20% on top of its market in October. The previous version of this article stated that WTI decreased 20% this week.