Oil plunged to the lowest level in five months as signs of robust supplies piled up.

West Texas Intermediate retreated as much as 4.3 per cent to below US$69 a barrel, the lowest since late June. Crude has slid for seven straight weeks, with even new output cuts by OPEC and its allies failing to halt the skid.

Prices continued to be battered by fresh signs that supplies remain ample. The weekly average of Russia’s seaborne crude exports jumped to the highest level since early July, and a U.S. government agency raised its estimate for the country’s oil output this year by 30,000 barrels a day from its projection last month.

Spreads between monthly contracts continue to indicate oversupply, with the front end of the Brent futures curve this week closing at the weakest level since June. 

“Futures are trying to solidify a bottom from last week’s selloff,” said Dennis Kissler, senior vice president for trading at BOK Financial Securities. “The contango structure of back-month futures gaining on front month is setting the tone that current supplies seem ample.”

Oil is on the longest weekly losing streak since 2018 and is down by about more than a quarter from this year’s peak in late September. Forecasts for slowing Chinese consumption growth and lingering risks of recession in the U.S. are making for a gloomy demand outlook in the first quarter. 

This week, the International Energy Agency, the Organization of Petroleum Exporting Countries and the U.S. Energy Department will publish their latest monthly assessments of market fundamentals. Investors also will monitor the Federal Reserve’s final rate decision of the year.

Prices:

• WTI for January delivery fell 4.1 per cent to $68.41 a barrel at 1:08 p.m. in New York.
• Brent for February settlement dipped 3.9 per cent to $73.07 a barrel.