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Oil hits skids, slips back into bear territory

So much for that rebound in oil prices.

After climbing to a recent peak of $54.45 per barrel Feb. 23, U.S.-produced crude has tumbled more than 20% to $43.23, according to Bloomberg data, putting it back in bear market territory and at its lowest level since August.

The market is still plagued by a glut of oil, despite OPEC members agreeing last month to extend a deal through March 2018 to reduce global supply by 2% in a bid to stabilize prices. But rising production in countries such as the U.S., where oil-shale drilling continues, and Libya, which is exempt from OPEC cuts, has added to oversupply worries.

Ironically, U.S. crude supplies have fallen nine of the past 10 weeks, and analysts are expecting an additional drawdown of 2 million barrels when the U.S. Energy Information Administration reports data Wednesday for the week ended June 16, according to oil tracker S&P Global Platts.

But traders have “overlooked these headlines,” S&P Global Platts Oil Futures editor Geoffrey Craig says. “They are taking cues from rising U.S. crude production and steadily high imports, both of which represent major headwinds for oil” prices. U.S. oil exports also “represent additional supply in the global market.” Last week, more than 7 million barrels of crude were “floating around the North Sea,” Craig says.

Cheaper crude is hurting energy stocks, which are down about 8% since oil peaked in February, S&P Dow Jones Indices says.