Oil slumped again on Friday, extending the week’s loss to the largest in eight months, as swelling storage of crude on both land and sea pressured prices.
Brent, the global benchmark for oil, settled down 1 percent and less than $2 from a new 6-1/2-year low.
U.S. crude fell 2 percent, barely holding above $40 a barrel.
Both benchmarks lost 8 percent on the week, the most since mid-March.
Oil prices have fallen in seven of the last eight sessions, with losses accelerating after U.S. government data on Thursday affirmed a seventh weekly rise in U.S. crude inventories that took stockpiles near April’s record highs.
Adding more pressure to prices, data on Friday showed the first rise in the U.S. oil rig count in 11 weeks.
The International Energy Agency (IEA) said there was a record 3 billion barrels of crude and oil products in tanks worldwide.
“The evolving bearish global balances that we alluded to all year are acquiring increased transparency,” said Jim Ritterbusch of Chicago-based oil consultancy Ritterbusch & Associates.
Brent settled down 45 cents at $43.61 a barrel, as the December contract which served as the front-month expired. It lost nearly $4 on the week.
U.S. crude finished down $1.01 at $40.74, losing $3.65 on the week.
The slump extended to oil products as well, with U.S. gasoline futures closing near 10-month lows.
While the downturn was triggered by weak fundamentals across the petroleum complex, oil was also caught in a broader commodities selloff. The Thomson Reuters/Core Commodity CRB Index, a global gauge for the asset class, was near its lowest since 2002.
An estimated oversupply of 0.7 million to 2.5 million barrels per day has pushed crude prices down by almost two-thirds since June 2014.
Tens of millions of barrels are sitting on tankers at sea, looking for buyers.
The IEA said a mild winter could further swell the global glut.
The premium for storing U.S. crude for one year over crude for delivery in December hit record highs on Friday as traders deferred shipments in the hope of getting higher prices later.
The entire strip of futures prices for the next six months has also weakened over the past four weeks. [KEMP/]
Options trading has, meanwhile, spiked with a soaring number of options taken to sell crude if prices fall to $40 or even $25.
(Additional reporting by Libby George in London and Henning Gloystein in Singapore; Editing by David Gregorio Editing by Nick Zieminski)