Investing.com - Crude oil futures fell to multi-year lows on Friday, before reversing losses to end the session modestly higher as investors returned to the market to seek cheap valuations.
On the New York Mercantile Exchange, crude oil for delivery in November hit a daily low of $83.59 a barrel, a level not seen since July 2012. Nymex prices recovered to end the day at $85.82, up 5 cents, or 0.06%.
For the week, New York-traded oil futures lost $3.92, or 4.36%, the fourth weekly decline over the past five weeks.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for November delivery fell to a session low of $88.11 a barrel on Friday, the weakest level since December 2010.
London-traded Brent prices rallied off the lows to settle the day at $90.21, up 16 cents, or 0.18%.
For the week, the November Brent contract dropped $2.10, or 2.27%, the third straight weekly loss.
Meanwhile the spread between the Brent and the WTI crude contracts stood at $4.39 a barrel by close of trade on Friday, compared to $2.57 in the preceding week.
Crude oil futures sold off sharply as concerns over the global economic outlook and ample supplies drove prices lower.
The International Monetary Fund cut its global economic growth forecasts for the third time this year on Tuesday and warned that the recovery remains weak and uneven.
The organization is now forecasting global economic growth of 3.3% this year, down from 3.4% in July and expects growth of 3.8% in 2015, compared to an earlier prediction of 4.0%.
Investor sentiment was also hit by fears that Germany, the euro zone’s largest economy is being dragged into a recession after recent data indicated unexpected weakness in manufacturing and exports.
Global supplies have far outpaced demand in recent months, sparking speculation among traders about whether the Organization of the Petroleum Exporting Countries would lower production to keep prices high.
A report last week showed OPEC oil output hit a two-year high of 31 million barrels per day in September.
Some market analysts believe that only a cut in output by the oil cartel will halt the decline in prices.
In the week ahead, investors will be awaiting U.S. data on retail sales and industrial production for fresh indications on the strength of the economic recovery. Tuesday’s ZEW report on German economic sentiment will also be closely watched.
Data from the Commodities Futures Trading Commission released Friday showed that hedge funds and money managers decreased their bullish bets in New York-traded oil futures in the week ending October 7.
Net longs totaled 192,208 contracts as of last week, down 4.8% from net longs of 201,863 in the preceding week.