Crude oil prices were falling for the sixth consecutive frame Friday as traders were given very little positive data to work with this week and a U.S. presidential election, which has the potential to affect some energy markets by several accounts, is just around the corner.
WTI crude futures fell about 1.9% by 10 a.m. ET on Friday to $43.85, while global benchmark Brent crude contracts for January delivery were down 2.2% at $45.32.
On Thursday, WTI futures settled below the psychologically significant $45 per barrel mark for the first time since Sept. 27.
The causes for oil's precipitous decline are many: Domestic crude oil stockpiles surged by a record 14.4 million barrels in the week ending Oct. 28, according to the U.S. Energy Information Agency, sending West Texas Intermediate crude contracts for December delivery tumbling 2.9% Wednesday.
Meanwhile, crude oil demand growth continues to slow, according to the International Energy Agency, which forecasts demand to expand by 1.2 million barrels per day this year, with a similar gain expected in 2017.
Growth fell from a five-year high in the third quarter of 2015 to a four-year low in the third quarter of 2016, due to vanishing growth from the 35 member countries in the Organisation for Economic Co-operation and Development and a marked deceleration in China, the IEA reported in October.
Doubts also continue to swirl in the market place over whether the Organization of Petroleum Exporting Countries, or OPEC, will come to an agreement on some form of production cut by Nov. 30.
Some industry followers have said there's a declining probability that the group of 14 nations will reach an agreement after the cartel failed to make a deal at the end of October, while others believe OPEC will be forced to deal, even if Saudi Arabia has to take the entire 2-million-barrel-a-day cut themselves.
If OPEC does come to some form of an agreement, cuts could drive oil higher, according to Edward Westlake, an analyst with investment bank Credit Suisse. OPEC inaction, on the other hand, could mean the sector would face continued excess crude inventory through the first half of 2017, potentially prolonging a commodity downturn that has already lasted much longer than many anticipated.
And there are still plenty of other sources of volatility on the horizon for the broad energy sector, Westlake says.
At the end of November, the U.S. Environmental Protection Agency will rule on the renewable fuels mandate for 2017 and is under some pressure to change the point of obligation, the analyst explained in a Nov. 4 research note.
Meanwhile, the candidates for U.S. President, namely Democratic candidate Hillary Clinton and Republic candidate Donald Trump, have differing views on corporate taxation (a cut would be beneficial to the crude oil refiners).
But neither Trump or Clinton will be a game-changer for the U.S. shale drilling industry, analysts with Canadian investment bank Canaccord Genuity said earlier this week.
While Trump has promised to make drilling easier for U.S. oil and natural gas exploration and production companies, the analysts don't see him overturning any regulations that will meaningfully affect production directly.
As for Clinton, Canaccord doesn't see the Democratic candidate challenging the energy industry's status quo.
In any case, if crude continues on its current downward trend-- its longest losing streak since June --the Nov. 8 election is not likely to move the needle.
Instead, look to Nov. 30, when OPEC is expected to make a formal decision: In the month following OPEC's November 2014 decision to keep producing oil at levels above those needed to meet demand at the time, West Texas Intermediate oil prices fell $11.42 or 17%, while Brent crude prices fell $10.70 or 15%.