EnergyWatch

Oil price close to bear market

The US oil price has now declined by close to 17 percent from its high level at the beginning of October, while Brent oil in Europe, which declined by 3.6 percent Thursday, is lying just 16 percent from its peak the same day Oct 3.

/Ritzau Finans/AP/Jacob Ford
Photo: /Ritzau Finans/AP/Jacob Ford

The oil price continued its decline Thursday, sitting close to 3.0 percent lower at USD 63.44 for a barrel of WIT crude oil, the lowest level since the beginning of April, so it is not long until the oil market becomes bearish.

This also marks the fourth consecutive day of oil price decline, dropping by 10 percent in October from USD 73.25 to USD 65.32.

The oil price is being squeezed by news about increased production, which is working against declining deliveries from Iran, reports Financial Times. On Wednesday, US oil stocks showed the seventh weekly increase in a row, while Bloomberg News reports that OPEC's oil production in October was at its highest level in two years.

Investors have otherwise sent the oil price up in recent months because the United States' reintroduced sanctions against Iran mean that the country's oil production will not reach the world market. Speculations issued at the beginning of October sent the oil price up to its highest level in four years when it hit USD 76.41 for a barrel of crude in the US.

The US oil price has now declined almost 17 percent from the high level at the beginning of October while Brent oil in Europe, which declined by 3.6 percent Thursday, is sitting just 16 percent from its peak on the same day Oct 3.

When an asset falls by more than 20 percent from its latest peak, this is defined a a bear market.

Friday morning there has been small improvement in the WTI price, which lies at USD 63.74 per barrel.

English Edit: Lena Rutkowski

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