Oil fell over 2 percent on Friday, extending the week’s loss to the largest in eight months, pressured by swelling storage of crude on both land and sea.
U.S. crude traded slightly above $40 a barrel while benchmark Brent was less than $2 from setting new 6½-year lows. The slump widened to oil products with U.S. gasoline tumbling to 10-month lows.
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.
The International Energy Agency (IEA) added to the bearish sentiment on Friday, saying there was a record 3 billion barrels of crude and oil products in tanks worldwide.
Options trading has spiked with a soaring number of options taken to sell crude if prices fall to $40 or even $25.