SINGAPORE (Reuters) - Brent crude futures tumbled nearly US$2 to below US$89 a barrel on Friday, trading at their weakest since 2010, as rising supply and a weakening global economic outlook stretched a months-long slump in oil prices.
U.S. crude also slid by almost US$2 to hit its lowest since 2012, ratcheting up pressure on OPEC to slash output to rescue prices in the face of slow demand.
"I think we've arrived at a pivotal support level for both Brent and West Texas Intermediate. US$85 is the area where OPEC has intervened in the market in the past," said Ric Spooner, chief market analyst at CMC Markets in Sydney. "I'm not saying they will come in this time. They need to consider the overall supply situation - it might be too expensive."
Brent crude for November delivery was down US$1.55 cents at US$88.50 a barrel by 0333 GMT, after falling earlier to US$88.11 - its lowest since December 2010. Brent has fallen more than 23 per cent since hitting this year's high of US$115.71 in June.
U.S. November crude dropped US$1.57 to US$84.20 a barrel. The contract, also known as West Texas Intermediate (WTI), hit a session low of US$84.05, a level last seen in November 2012. WTI has fallen more than 6 per cent this week and is also down more than 20 per cent since its June peak.
Oil prices extended steep losses from Thursday that were fueled by dismal data from Germany which showed exports from Europe's top economy falling in August by the most since January 2009.
"There is panic at the moment. Bad news led to the sell-off in equities in the West and that triggered it," said an oil trader with a bank who declined to be identified due to company policy. "There is so much oil in the Mediterranean, Africa and everywhere. My biggest problem is where is the demand going to come from?" the trader said.
Supply is rising at a time when demand conditions are weakening. Apart from Europe, No. 2 oil consumer China is also seeing signs of an economic slowdown.