Oil enters bear market LONDON: Chronic oversupply sent oil prices slumping this week into a so-called bear market, losing 20 per cent from recent June peaks above $50.
In tumultuous trade on Wednesday, US benchmark West Texas Intermediate (WTI) struck $39.19 — which was the lowest level since April 18.
And on Tuesday, Europe’s main contract Brent North Sea crude slid to $41.51 — which was also a trough last reached on that same day.
Oil industry experts argue that the market got caught up in forecasts that supply and demand would shift into balance in 2016.
The International Energy Agency had forecast in April that oil was expected to almost balance out in the second half of the year.
“Crude prices have re-entered bear market territory,” said analysts at London-based consultancy Energy Aspects in a research note. “The problem has been that the market priced in a full rebalancing too quickly and discounted the scale of the inventory overhang, which has left many disappointed.”