Global oil prices dipped below $90 a barrel for the first time in more than two years Thursday as investors saw new signs that global supplies will continue to surpass demand.
Both Brent, the global benchmark, and the U.S. standard are trading more than 20% below a recent high, meeting the definition of a bear market. Prices have slumped for nearly four months as global supplies remain ample.
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At the start of PIRA Energy Group's widely attended seminar in New York on Thursday, the research firm predicted oil prices have further to fall, Reuters reported. PIRA is typically considered optimistic on energy prices, market participants say. The seminar is closed to the press.
"There's an entire bearish psychology that seems to be taking hold," said Andy Lebow, senior vice president for energy at Jefferies LLC. "I think today was a continuation."
Brent prices fell as low as $89.90 a barrel in intraday trading. Front-month November futures settled down $1.33, or 1.5%, at $90.05 a barrel on ICE Futures Europe, the lowest price since June 21, 2012.
In the U.S., light sweet crude for November delivery fell $1.54, or 1.8%, to $85.77 a barrel, the lowest level since Dec. 10, 2012.
Both contracts fell about 60 cents lower in the 30 minutes after the market closed.
Market watchers are waiting on the Organization of the Petroleum Exporting Countries to release its monthly report on the oil market on Friday. The group of oil-producing nations has cut its forecast for global growth in oil demand in recent months, and another reduction in its estimate could push prices lower.
The U.S. Energy Information Administration cut its own forecasts for demand growth on Tuesday.
"Bottom line, the demand is just not keeping up with supply," said Tariq Zahir, managing member of Tyche Capital Advisors. "I think we will continue to go lower."
Mr. Zahir said prices could bounce higher as traders who bet on lower prices lock in profits following the recent steep selloff. If they do, he will add new wagers on falling prices, he added.
The dollar strengthened against foreign currencies Thursday, also pressuring oil prices. A stronger dollar makes dollar-traded oil more expensive to buyers using foreign currencies.
Market participants are watching OPEC for signs that the group of oil-producing nations will reduce output to boost prices.
"OPEC has been relatively slow and quiet to respond," said Mike Corley, president of Mercatus Energy Advisors, a Houston consulting firm. "The market's going to continue to be well supplied."
OPEC has a meeting scheduled at the end of November, but prices could rally before then if the group signals that it plans to cut production, analysts say.
"Overall, demand has to come back up," said Ed Kevelson, head of U.S. over-the-counter energy at brokerage Newedge U.S.A., which is owned by Société Générale. For prices to rebound, he said, "you'd probably have to see a clear Saudi signal of taking their foot off the pedal some time before the end of November's [OPEC] meeting, and you'd probably have to see some of the other outside factors," such as stronger demand growth in China.
November reformulated gasoline blendstock, or RBOB, fell 4.35 cents, or 1.9%, to $2.2749 a gallon, the lowest level since Nov. 30, 2010.
November diesel slipped 3.93 cents, or 1.5%, to $2.5366 a gallon, the lowest level since June 22, 2012.