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Oil hit with longest losing streak on record

New York (CNN Business) Not even Saudi Arabia could prevent crude oil from suffering the longest losing streak on record.

US oil prices initially jumped on Monday after Saudi Arabia signaled plans to combat oversupply fears by cutting production. But the rally faded, and crude eventually closed below $60 a barrel for the first time since February.

Crude has now lost ground for 11 consecutive days, the longest slide since oil futures trading was introduced on the NYMEX in March 1983. The historic slump knocked oil into a bear market — barely a month after it hit four-year highs. Selling accelerated in extended trading, with crude breaking below $59 a barrel.

Monday's drop signals skepticism from investors that Saudi Arabia will be able to quickly mop up a glut of supply that has suddenly emerged.

"It will take time," said Ben Cook, portfolio manager at BP Capital Fund Advisors, an energy investment firm. "The market is in a show-me state. It wants to see the impact of those supply cuts."

The oil bear market has been sparked by a wide range of factors, including the global growth worries that have rocked the stock market. The Dow declined 602 points on Monday and the Nasdaq lost nearly 3%.

Another concern: US oil production has skyrocketed to record highs, potentially getting ahead of demand.

Trump administration also took a softer-than-expected approach to Iran sanctions. The United States eased concerns by granting temporary waivers that allow China, India and other countries to keep buying Iranian crude.

Saudi Arabia announced plans on Monday to reduce shipments by half a million barrels per day in December. And the kingdom voiced support for OPEC and its allies further cutting output next year.

Khalid Al Falih, Saudi Arabia's energy minister, said on Monday that OPEC and its allies realize they "need to do whatever it takes to balance the market."

The news sent crude soaring as high as $61.28 a barrel. Most of the selloff occurred before President Donald Trump voiced opposition to Saudi Arabia's efforts to balance the market.

"Hopefully, Saudi Arabia and OPEC will not be cutting oil production," Trump tweeted at 1:21 p.m. ET. "Oil prices should be much lower based on supply!"

It's unclear whether Trump's comments will force Saudi Arabia to shift strategies. The president repeatedly blamed OPEC earlier this year for higher oil prices. Saudi Arabia later stepped up and increased output to prevent prices from rising further.

"President Trump remains a big unknown," Helima Croft, global head of commodity strategy at RBC Capital, wrote to clients on Sunday. "His Twitter comments and back channel pressure played a pivotal role in prompting Saudi Arabia and its key OPEC allies to open the taps."

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