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WTI Extends Drop Into Bear Market; Brent at Lowest Since 2010

Photographer: Jamie Schwaberow/Bloomberg

A worker walks through an Anadarko Petroleum Corp. 

West Texas Intermediate extended its slump into a bear market amid speculation that rising global oil supplies will be more than enough to meet slowing demand.London’s Brent traded at the lowest price since December 2010.

Futures fell as much as 2.5 percent in New York, set for the biggest weekly drop since June 2012. The shale boom boosted U.S. production while the Organization of Petroleum Exporting Countries pumped the most oil in 13 months. Saudi Arabia reduced prices for November exports to Asia to a six-year low as the IMF downgraded its global growth forecasts.

“We look to be in a capitulation phase in the oil market where investors are acquiescing to the reality of the supply overhang,” Ric Spooner, a chief strategist at CMC Markets in Sydney, said by phone today. “The trigger was the news that Saudi Arabia was cutting prices. We’re certainly into the region where OPEC may consider acting.”

WTI for November delivery declined as much as $2.18 to $83.59 a barrel in electronic trading on theNew York Mercantile Exchange and was at $83.86 at 1:13 p.m. Singapore time. The contract decreased $1.54 to $85.77 yesterday, the lowest close since December 2012. Prices, down 6.6 percent this week, are more than 20 percent below a recent peak, meeting a common definition of a bear market. The volume of all futures traded was more than two times the 100-day average.

Brent for November settlement slid as much as $1.94, or 2.2 percent, to $88.11 a barrel on the London-based ICE Futures Europe exchange. It’s poised for a third weekly loss. The European benchmark crude, also in a bear market, traded at a premium of $4.57 to WTI, compared with $2.57 on Oct. 3.