Oil has settled below $60 a barrel for the first time this year coinciding with the unravelling of global equity markets.
West Texas Intermediate slipped $1.95 on Friday to settle at $59.20 a barrel on the New York Mercantile Exchange, the worst weekly figures for WTI in two years.
Brent fell $2.02 to settle at $62.79 on the London-based ICE Futures Europe exchange.
The falling oil price coincides with US government data showing weekly US production jumped to a record 10.25 million barrels a day while the nation’s stockpiles of crude rose for a second straight week.
Over the week, US crude has fallen nearly 9.6 per cent, while Brent is down about 8 per cent.
All of this is putting pressure on oil and gas companies with the e S&P 500 Energy Index facing an 8.5 percent drop this week, the largest on a weekly basis since September 2015.
While the Organization of Petroleum Exporting Countries and Russia struck a deal to curtail output and prop up prices, the concern for investors is that production in the US is moving so fast that it might elbow OPEC led by Saudi Arabia aside.