WTI Crude Falls Below $60 as Oversupply Fears Rise

Oil prices fell for a 10th consecutive session on Friday, sinking U.S. crude futures deeper into bear market territory and wiping out the benchmark’s gains for the year.

Crude futures are poised for their fifth straight week of losses as growing output from key producers and a deteriorating outlook for oil demand deepen a sell-off spurred by October’s broader market sell-off.

The drop marks a stunning reversal from last month, when oil prices hit nearly four-year highs as the market braced for potential shortages once U.S. sanctions on Iran, OPEC’s third biggest oil producer, snapped back into place.


West Texas Intermediate graph

“The market’s not tight. I think there are windows where you could perceive it to be tight, and I think the markets got caught into that,” Christyan Malek, head of EMEA oil and gas research at J.P. Morgan told CNBC on Friday. “The reality is that we’re still in a world where we’re overproducing and we’ve got surplus.”

U.S. West Texas Intermediate crude fell 82 cents, or 1.4 percent, to $59.85 by 9:03 a.m. ET (1403 GMT). The contract is now down nearly 1 percent since the start of the year. It fell as low $59.28 on Friday, its weakest level in nearly nine months.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza