Oil prices slumped to their lowest level since late 2017 on Friday. A supply glut and an overwhelmingly pessimistic economic outlook led to the record fall for the year.
Brent crude (BZ=F) futures (CL=F) reached their lowest level since December 2017 at $61.52 per barrel on Friday morning, while US West Texas Intermediate (WTI) crude futures declined by 2.3% to $53.38 a barrel, recovering from a low at $52.82.
On Tuesday prices for WTI crude had fallen to $52.77 a barrel, which was the lowest since October 2017.
Internationally, Brent crude is the dominant market mover and its supply has steadily risen. The Organization of the Petroleum Exporting Countries (OPEC) is expected to start reducing output after a meeting on 6 December.
Saudi Arabia, the world’s largest oil exporter, had signalled its output may have reached a record high, while US crude inventories increased for a ninth week. This is the longest run of supply gains since March 2017.
Global oil supply has skyrocketed this year. The main producers United States, Russia and Saudi Arabia cater to a third of world demand, delivering about 100 million barrels per day.
“The market is currently oversupplied. An oversupplied market has a difficult time setting a [price] floor,” said US investment bank Jefferies.