Brent crude slid into a bear market on concern rising global supplies will be more than enough to meet slowing demand. West Texas Intermediate dropped to a 17-month low after inventories jumped the most since April.
Brent closed 21 percent below its June peak, meeting the common definition of a bear market. U.S. production is set to increase to the most in more than three decades amid higher output from shale formations. Supplies from OPEC rose last month and Russian output neared a post-Soviet record. The International Energy Agency reduced demand projections for this year and next.
“There’s a lot of news out there and it all points to lower prices,” Rob Haworth, a senior investment strategist in Seattle at U.S. Bank Wealth Management, which oversees about $120 billion of assets, said by phone. “It doesn’t look like demand is going to pick up anytime soon. On the supply side it doesn’t look like OPEC is ready to make the cuts needed to boost prices. The path of least resistance is lower.”