Oil prices extended their freefall on Friday, nearing 11-year lows, after the International Energy Agency warned that global oversupply of crude could worsen next year.
Brent and US crude's West Texas Intermediate futures fell as much as 5% on the day and 12% on the week as mild pre-winter weather and a plummeting US stock market added to the toll on oil prices.
Oil traders and analysts alike have been perplexed by oil's decline since the Dec. 4 meeting of the Organization of Petroleum Exporting Countries which all but abandoned price support for crude by removing production ceiling in an oversupplied market, Reuters reported.
Brent's front month slipped below $38 a barrel for the first time since December 2008, settling down $1.80, or 4.5%, at $37.93. The benchmark's session low was $37.36 -barely a dollar above the $36.20 hit during the financial crisis.
If Brent falls below that level in the coming week, that will be its lowest since mid-2004 when it traded at around $34 a barrel.
WTI's front-month settled in the $35 territory the first time since February 2009. The contract finished the session down $1.14, or 3%, at $35.62, after hitting an intraday low at $35.35. WTI's financial crisis low was $32.40 in December 2008.
A year ago, Brent and US crude were trading at around $60 a barrel, and during early summer 2014, above $100. Now, WTI contracts through 2024 are under $60.
The IEA warned that demand growth was starting to slow.
"Consumption is likely to have peaked in the third quarter and demand growth is expected to slow to a still-healthy 1.2 million barrels per day in 2016, as support from sharply falling oil prices begins to fade," the energy watchdog said in its monthly oil report.
Crude prices have fallen with little restraint since OPEC abandoned its output ceiling of 30 million bpd. Led by No. 1 crude exporter Saudi Arabia and other big Middle East oil producers such as Iraq, the group pumped 31.7 million bpd in November. That was more oil than in any month pumped by OPEC since late 2008.