Crude oil futures were down as much as 5% on Thursday as concerns of a supply squeeze faded amid rising inventories and fears of a slowdown in the global economy.
On Thursday, West Texas Intermediate (CL=F) crude oil futures fell more than 5.5% to just north of $72 per barrel. Brent (BZ=F) crude oil, the international benchmark price, fell by about the same amount to just below $77.
Over the last month, WTI crude oil is down more than 16% while the price of Brent crude is off more than 14%.
Current oil prices are roughly 22% lower than 2023 highs reached in late September, as demand worries grow amid concerns of a global economic slowdown. Oil prices are on pace to log their fourth straight losing week.
On Wednesday, US inventories at Cushing, Okla. — used as the benchmark in WTI oil pricing — showed stockpiles rose by 3.6 million barrels last week, more than twice expectations for a build of 1.2 million barrels.
“The oil production surveys for October have been showing increasing amounts of OPEC+ production and combined with higher inventories in the USA and worries over demand, prices have been falling,” said Andy Lipow, president at Lipow Oil Associates.
“When the market broke through $78, the selling accelerated as programmed trading kicked in.”
Dennis Kissler, senior vice president at BOK Financial, also noted the breakdown in the technical setup around the 200-day moving average, which currently stands at just north of $78 per barrel.
“Technically, [December] crude futures continue to battle the 200-day moving average, which is a key technical support area; a weekly close below will likely prompt more selling,” Kissler said.
On Monday, the world’s major oil producers pushed back against downbeat sentiment in the crude markets. OPEC’s latest monthly oil report said “fundamentals remain strong despite exaggerated negative sentiments.”
OPEC, a group of major oil exporting countries, is scheduled to meet on Nov. 26.
The organization’s current production cuts, aimed at restricting supply and keeping a floor on oil prices, are scheduled to continue through 2024.
Additionally, Saudi Arabia has put unilateral cuts in place of one million barrels per day through year-end while Russia also has supply curbs in effect during the same period.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on Twitter at @ines_ferre.