Oil Slammed as Market Freefall Continues for 12th Day

Investing.com – The selloff in oil showed no signs of slowing Tuesday as crude futures fell more than 4%, taking the market into a near-unprecented bear period.

Twelve straight days of losses — a situation not seen since the 1980s — have left oil prices down 25% or more, prompting Saudi Arabia and OPEC to plan emergency supply cuts amid ramping U.S. crude production.

Traders and analysts who had seen the market’s worst swings in years were nonplussed by the sheer price collapse of the past six weeks.

“On the crude oil front one must ask: Does the futures market see a global recession? Or what ominous sign does it see that would slow movement of product with demand at an all-time high?” asked Daniel Flynn, analyst at Chicago’s Price Futures Group.

“We have not seen (as many) consecutive down days in oil since the bust in 1984. That says a lot, even with the selloff after September 11th 2001,” Flynn added. “We do know that this industry is a boom or a bust and there are still traders expecting a super cycle to the upside. But this break to the downside would have most seasoned traders second guessing themselves.”

By 11:31 a.m. ET (16:31 GMT), U.S. was down $2.66, or 4.5%, at $57.27 per barrel, after sinking to a 11-month low of $56.86. The U.S. crude futures market has lost about 26% since hitting four-year highs of nearly $77 in early October.

slumped $3.10, or 4.4%, to $67.01 per barrel, after hitting an eight-month low at $66.67. The U.K.-traded global oil benchmark has lost about 23% from an October peak of nearly $87.

The market has paid little heed so far to warnings of production cuts to come, focusing instead on U.S. crude production standing at record highs of 11.6 million barrels per day.

Saudi Arabia, the world’s top crude exporter, is expected to announce at the weekend that it will reduce suppply by 0.5 million bpd in December.

OPEC, which will meet on Dec. 6 and also convene with major oil producer Russia after that, is expected to cut supplies further in the new year.

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