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Oil prices fall into bear market on rising supply, economic concerns

Reuters  |  SINGAPORE 

By Gloystein

SINGAPORE (Reuters) - markets on Friday remained weak as rising supply and concerns of an economic slowdown pressured prices, with U.S. crude now down by around 20 percent since early October.

U.S. Intermediate (WTI) futures were at $65.60 per barrel at 0509 GMT, down 4 cents, or 0.1 percent from their last settlement. WTI is set to fall for a fifth week, down 4.1 percent so far this week.

Front-month Brent futures were at $70.69 a barrel, 4 cents above their last close. Brent is set for a 2.9 percent drop for the week, its fifth straight week of declines.

Both Brent and WTI have declined by around 20 percent from the four-year highs they reached in early October.

"continue to decline and are now officially in a bear market, having declined 20 percent from their (October) peak," said William O'Loughlin, at Australia's

said on Friday that "Brent oil may slide further into a range of $68.59-$69.69 per barrel."

That would be the first time Brent has fallen below $70 since April.

Analysts said the main downward price pressure came from rising supply, despite the U.S. sanctions against that were imposed this week, as well as concerns over an economic slowdown.

"As OPEC exports continue to rise, inventories continue to build which is putting downward pressure on oil prices," analysts at Bernstein Energy said.

"A slowdown in the global economy remains the key downside risk to oil," Bernstein added.

The decline in prices over the past weeks follows a rally between August and October when crude rose ahead of the re-introduction of sanctions against Iran's on Nov. 5.

The sanctions, however, are unlikely to cut as much oil out of the market as initially expected as has granted exemptions to Iran's biggest buyers which will allow them to continue buying limited amounts of crude for at least another six months.

(CNPC) said on Friday it was continuing to take oil from Iranian oilfields in which it has ownership stakes.

"Our main cooperation with is upstream investment. Lifting is recouping our investment there," Hou Qijun, for CNPC, said on the sidelines of an industry event in

Bernstein Energy expects "Iranian exports will average 1.4-1.5 million barrels per day (bpd)" during the exemption period," down from a peak of almost 3 million bpd in mid-2018.

(Reporting by Gloystein; Editing by and Christian Schmollinger)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, November 09 2018. 10:40 IST
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