West Texas Intermediate oil fell below $90 for the first time in 17 months amid signs that supplies from Russia, Saudi Arabia and the U.S. are outstripping demand. Brent, Europe’s benchmark, headed for a bear market.
WTI futures dropped as much as 2.8 percent to $88.18 a barrel in New York, bringing the decline to 10 percent this year. Brent has fallen 20 percent from its peak in June. Losses in WTI below $90 would slow U.S. production, Goldman Sachs Group Inc. said yesterday. The nation’s output will rise next year to the highest since 1970, according to the Energy Information Administration.
The shale boom has turned the U.S. into the world’s largest producer of liquid petroleum, reducing its appetite for imports just as global demand growth slows. Saudi Arabia, the world’s largest oil exporter, yesterday cut its official selling price for crude to Asia to the lowest since 2008. Russian data today showed the country’s output rose to near a post-Soviet record. Kurdistan’s output growth may exceed the increase in Chinese demand over the next 15 months.
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