UPDATE 10-Oil falls below $70 as U.S. crude enters 'bear market'

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* U.S. crude down 21 pct from October peak, Brent down 18pct

* Iran sanctions impact dampened by broad exemptions

* U.S., Russia, Saudi crude output: https://tmsnrt.rs/2Rua0R8

* Asia gasoline margins turn negative: https://tmsnrt.rs/2PNUIcZ (Updates prices in paragraphs 3-4)

By Christopher Johnson

LONDON, Nov 9 (Reuters) - Oil prices fell to multi-monthlows on Friday as global supply increased and investors worriedabout the impact on fuel demand of lower economic growth andtrade disputes.

Benchmark Brent crude LCOc1 fell below $70 a barrel forthe first time since early April, down more than 18 percentsince reaching four-year highs at the beginning of October.

Brent dropped $1.52 to a low of $69.13 before recovering toaround $69.55 by 1430 GMT, down 4.5 percent for the week and 16percent this quarter.

U.S. light crude CLc1 fell for a 10th successive day,dropping under $60 a barrel to its lowest in eight months. TheU.S. crude contract hit a low of $59.28, down $1.39 and off morethan 20 percent since its peak in October. That put it in "bearmarket" territory, borrowing a definition used in stock markets.

"Oil prices are being hit by the double whammy of risingsupplies and demand concerns," Interfax Europe analyst AbhishekKumar said.

Oil peaked in October on concerns that U.S. sanctions onIran that came into force this week would deprive the oil marketof substantial volumes of crude, draining inventories andbringing shortages in some regions.

But other big producers, such as Saudi Arabia, Russia andshale companies in the United States, have increased outputsteadily, more than compensating for lost Iranian barrels.

The United States, Russia and Saudi Arabia are pumping at ornear record highs, producing more than 33 million barrels perday (bpd), a third of the world's oil.

The U.S. sanctions, meanwhile, are unlikely to cut supply asmuch as expected. Washington has granted exemptions to Iran'sbiggest buyers, allowing them to buy limited amounts of oil forat least another six months. urn:newsml:reuters.com:*:nL4N1XK10Q

China National Petroleum Corp said it was still taking oilfrom Iranian fields in which it has stakes. urn:newsml:reuters.com:*:nL4N1XK1NT

Washington has said it wants to force Iranian oil exportsdown to zero, but Bernstein Energy now expects "Iranian exportswill average 1.4 million to 1.5 million bpd" during theexemption period, about half the volume in mid-2018.

"As OPEC exports continue to rise, inventories continue tobuild, which is putting downward pressure on oil prices,"Bernstein said. "A slowdown in the global economy remains thekey downside risk to oil."

A glut in the refining sector, where a wave of unsoldgasoline has pulled profit margins into negative territory, mayalso lead to a slowdown in new crude orders as refiners scaleback operations. urn:newsml:reuters.com:*:nL4N1XJ41S

FACTBOX-The knowns and unknowns of U.S. Iran oil sanction
waivers    urn:newsml:reuters.com:*:nL4N1XK10Q
GRAPHIC: Russian, U.S. & Saudi crude oil production   https://tmsnrt.rs/2CTwqaq
(Reporting by Christopher Johnson in London and HenningGloystein in Singapore; Editing by Dale Hudson and EmeliaSithole-Matarise) ((christopher.johnson@thomsonreuters.com; +44 7790 561 651; Reuters Messaging: christopher.johnson.reuters.com@reuters.net))

This article appears in: Stocks , World Markets , Oil , Commodities

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