File photo: A view of Equinor's oil platform in Johan Sverdrup oilfield in the North Sea, Norway. Image Credit: Reuters

London: Oil extended a run of declines after falling into a bear market, heading for its longest losing streak on record.

Futures in New York fell for a 10th day, extending a dramatic plunge that’s dragged prices down more than 20 per cent from a four-year high reached in early October. In London, Brent sank to a seven-month low below $70 a barrel. The drop comes days before the Organisation of Petroleum Exporting Countries meets with partners in Abu Dhabi, having signalled it may cut output next year.

Oil’s decline has been exacerbated by a US decision to allow eight countries to continue importing from Iran, which it slapped with sanctions earlier this week. That decision, as well as pledges by Saudi Arabia and other producers to pump more and gains in American supply and stockpiles, have turned fears of a supply crunch into talk of an oversupply.

“The focus is on negative sentiment in oil and negative momentum,” said Giovanni Staunovo, a commodity analyst at UBS Group AG. “It’ll be interesting to see if some stick with their shorts over the weekend with the Opec meeting.”

West Texas Intermediate for December delivery dropped $1.07 to $59.60 a barrel on the New York Mercantile Exchange at 8:50am in New York. The contract fell 1.6 per cent on Thursday, and is headed for a 5.6 per cent decline on the week — its fifth consecutive such decrease. Total volume traded was 81 per cent above the 100-day average.

Brent futures for January settlement slid 93 cents to $69.72 a barrel on the London-based ICE Futures Europe exchange. Prices are also on course for a fifth weekly drop, down 4.2 per cent. The global benchmark crude traded at a $9.87 premium to WTI for the same month.

US stocks slumped as investors considered what a tumble in oil prices means for the economy. The dollar extended a gain and gold dropped after a report showed producer prices rose more than forecast in October.

At 9:57am. EDT the Dow Jones Industrial Average was down 151.20 points, or 0.58 per cent, at 26,040.02, the S&P 500 was down 20.80 points, or 0.74 per cent, at 2,786.03 and the Nasdaq Composite was down 82.86 points, or 1.10 per cent, at 7,448.02.

Nine of the 11 major S&P sectors were lower, with slight gains seen in the defensive real estate and consumer staples indexes.

Europe’s main equity gauge dropped after disappointing forecasts from Richemont and Thyssenkrup AG. Treasury yields edged lower after the Federal Reserve on Thursday reiterated its plan for “further gradual” rate increases.

A potential agreement by Opec to return to output cuts would mark the second production U-turn for the group this year. For Saudi Arabia — the world’s biggest crude exporter — it would be the third time in recent years that the kingdom has delivered a supply surge only to quickly reverse it.

In the US, crude production increased to a record 11.6 million barrels a day last week, according to Energy Information Administration data. Nationwide stockpiles rose by 5.8 million barrels, exceeding the 2 million-barrel gain expected in a Bloomberg survey.

OPEC’s output in October reached the highest level since 2016, while Russia last month pumped 11.4 million barrels a day, a post-Soviet record. Producers meeting this weekend will have to contend with not only the threat of a glut, but also the risk to demand from faltering emerging-market economies and a trade war between the US and China.