The price of Brent crude oil fell below the $70-a-barrel mark Friday for the first time in seven months, moving to the brink of bear-market territory.
Brent crude, the global benchmark, was down 1.6% at $69.55 a barrel on London’s ICE Futures Exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were down 1.7% at $59.67 a barrel.
The global benchmark was poised to join WTI in bear-market territory, after the U.S. price on Thursday extended its losses from the four-year-highs hit in early October beyond 20%.
Bear markets are generally defined as a 20% decline from a market peak and Brent was recently down 19.2% from its own four-year-high reached in October.
Oil-specific factors such as rising production and a softening in U.S. oil sanctions on Iran have combined with broader market concerns about global economic growth and earnings growth—which prompted equity market selloffs during October—to heavily pressure oil prices in recent
“We’ve seen high production from OPEC in the past couple of months—those supply fears have gone—and focus has turned to the fact that the global economy is slowing down a bit, particularly in China,” said Caroline Bain, chief commodities economist at Capital Economics.
Selling has accelerated in the past few days with the publishing of Energy Information Administration numbers showing U.S. oil inventories at a five-month high. Delegates from the Organization of the Petroleum Exporting Countries will have those figures in mind when they meet with non-OPEC members this weekend in Abu Dhabi.
Investors will be keeping a close watch on headlines from the OPEC+ conference, as a failure to signal a reversal in recent output hikes would likely pile further pressure on prices, Commerzbank analysts said in a note.
While many factors has combined to prompt oil selling, investors looking beyond short-term factors have good reason to be optimistic about a rebound in prices, analysts said.
Trump administration exemptions on Iranian oil sanctions will be temporary and equities markets have stabilized. Additionally, communications from Saudi Arabia that the gulf nation can tap into spare production to bridge the gap left by Iranian, Venezuelan and Libyan production shortfalls are overdone, according to Harry Tchilinguirian, global head of commodity markets strategy at BNP Paribas.
“While short-term factors have weighed on sentiment, we don’t think Saudi can offset those countries and oil demand’s going to rise seasonally, so this may be a good time to get into oil,” Mr. Tchilinguirian said.
Adding to pressure on the commodities at large Friday was the resurgence in the U.S. dollar. The WSJ Dollar Index—which measures the U.S. currency against a basket of 16 others—was up 0.2%, having reversed its losses in recent weeks and extended its year-to-date climb to 5.3%.
Dollar-denominated commodities like oil tend to become more expensive for other currency holders when the greenback rises.
Attention was also focused on North American production, after a Montana judge ordered a halt to construction on the Keystone XL pipeline.
Nymex reformulated gasoline blendstock—the benchmark gasoline contract—fell 0.19% to $1.64 a gallon. ICE gasoil changed hands at $650.75 a metric ton, down 2.8%.
Write to David Hodari at David.Hodari@dowjones.com
Corrections & Amplifications
WTI is off 20% from its market peak in October. A previous version of this article said WTI fell 20% this week.