Oil prices slumped more than 6 percent to the lowest in more than a year on Friday amid fears of a supply glut even as major producers consider cutting output, Reuters reported.
Oil supply, led by U.S. producers, is growing faster than demand and to prevent a build-up of unused fuel such as the one that emerged in 2015, the Organization of the Petroleum Exporting Countries is expected to start trimming output after a meeting on Dec. 6.
But this has done little so far to prop up prices, which have dropped more than 20 percent so far in November, in a seven-week streak of losses. Prices were on course for their biggest one-month decline since late 2014.
A trade war between the world’s two biggest economies and oil consumers, the United States and China, have weighed upon the market.
“The market is pricing in an economic slowdown - they are anticipating that the Chinese trade talks are not going to go well,” said Phil Flynn, an analyst at Price Futures Group in Chicago, referring to expected talks next week between U.S. President Donald Trump and his Chinese counterpart Xi Jinping at the G20 summit in Buenos Aires.
“The market doesn’t believe that OPEC is going to be able to act swiftly enough to offset the coming slowdown in demand,” Flynn said.
Brent crude fell $3.13, or 5 percent, to $59.47 a barrel by 1:01 p.m. EST (1801 GMT), after earlier touching $58.41, its lowest since October 2017.
U.S. West Texas Intermediate crude (WTI) lost $3.35, or 6.1 percent, to trade at $51.28, and earlier touched a low of $50.53, also the weakest since October 2017.
For the week, Brent was on track for a 11 percent loss and WTI a 9.4 percent decline.
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