Oil markets stabilised on Friday but remained weak as rising supply and concerns of an economic slowdown pressured prices, with U.S. crude down by around 20 percent since early October.
U.S. West Texas Intermediate (WTI) crude oil futures were at $65.73 per barrel at 0629 GMT, 6 cents above their last settlement. WTI is set for a fifth weekly fall, down 4 percent so far this week.
Front-month Brent crude oil futures were at $70.84 a barrel, 19 cents above their last close. Still, Brent is poised for an almost 3 percent drop for the week, its fifth straight week of decline.
Both Brent and WTI have fallen by around 20 percent from the four-year highs they reached in early October.
"Oil prices ... are now officially in a bear market, having declined 20 percent from their (October) peak," said William O'Loughlin, investment analyst at Australia's Rivkin Securities.
Analysts said the main downward price pressure came from rising supply, despite the U.S. sanctions against Iran that were imposed this week, as well as concerns over an economic slowdown.
"As OPEC exports continue to rise, inventories continue to build which is putting downward pressure on oil prices," analysts at Bernstein Energy said.
"A slowdown in the global economy remains the key downside risk to oil," Bernstein added.
Traders said a glut in the refining sector, where a wave of unsold gasoline has pulled down profit margins into negative territory, may also lead to a slowdown in new feedstock crude orders, as refiners scale back operations to work down excess supply.
"The global gasoline glut reached Singapore this week, where gasoline cracks collapsed. Refining margins contracted across all regions, with gasoline cracks now near or below zero in all regions," U.S. investment bank Jefferies said in a note on Friday.
The decline in oil prices over the past weeks follows a rally between August and October when crude rose ahead of the re-introduction of sanctions against Iran's oil exports on Nov. 5.
The sanctions, however, are unlikely to cut as much oil out of the market as initially expected as Washington has granted exemptions to Iran's biggest buyers which will allow them to continue buying limited amounts of crude for at least another six months.
China National Petroleum Corp (CNPC) said on Friday it was still taking oil from Iranian fields in which it has stakes.
"Our main cooperation with Iran is upstream investment. Lifting equity oil is recouping our investment there," Hou Qijun, deputy general manager for CNPC, said on the sidelines of an industry event in Shanghai.
Bernstein Energy expects "Iranian exports will average 1.4-1.5 million barrels per day (bpd)" during the exemption period, down from a peak of almost 3 million bpd in mid-2018.