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Oil prices slump into ‘bear market’ after five weeks of losses

10 November 2018

Mr. Trump has repeatedly has asked oil producers to pump more crude to lower prices.

In this context, just months after some fund managers and analysts warned Brent could hit $100 or higher by the end of the year, it now seems a decline back to $70 a barrel is far more likely.

"Oil prices continue to decline and are now officially in a bear market, having declined 20 per cent from their (October) peak", said William O'Loughlin, investment analyst at Australia's Rivkin Securities.

"What a difference a month makes", said Michael Tran, commodity strategist at RBC Capital Markets.

Crude slumped after reaching a four-year high last month as the U.S. allowed eight countries to continue importing oil from the Persian Gulf state even after it hits the Opec producer with sanctions.

But other big oil producers, such as Saudi Arabia, Russia and shale producers in the United States, have increased output steadily, more than compensating for lost Iranian barrels. The U.S. crude CLc1 rose 58 cents to $62.79.

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The imposition of sanctions against Iran and those who do business with Iran has had a very limited impact on oil prices, due in large part to strong output from the USA and Russian Federation.

A South Korean delegation including oil buyers is expected to head to Iran next week to discuss resuming Iranian oil imports after a three-month halt, sources told Reuters.

The government also said that it had taken note of the U.S. statement that exception had been provided under the Iran Freedom and Counter Proliferation Act of 2012 with respect to development of Chabahar Port and the construction of an associated railway line.

"A slowdown in the global economy remains the key downside risk to oil", Bernstein added. "Because you have a monopoly called OPEC [the Organization of Petroleum Exporting Countries], and I don't like that monopoly".

The decline in prices over the past weeks follows a rally between August and October when crude was pushed up ahead of the re-introduction of sanctions against Iran's oil exports on November 5.

Oil prices slump into ‘bear market’ after five weeks of losses