Oil Nears a Bear Market

U.S. oil prices fell to near $41 a barrel on Thursday and have tumbled close to bear-market territory since early June, reflecting concerns the world is still awash in crude.

An expanding gasoline glut world-wide and early signs of increasing production in the U.S. and from the Organization of the Petroleum Exporting Countries have dragged down oil prices from a 52-week high of $51.23 reached June 8. The market is now down 19.7% since then, just short of a 20% drop from a recent high that defines a bear market.

"We believe this world of low [prices] and a lot of volatility in prices is here to stay," Ryan Lance, chief executive of ConocoPhillips, told investors on a Thursday conference call in which the company reported a $1.07 billion loss. "We're seeing that in spades right now."

U.S. crude for September delivery fell to its latest in a series of three-month lows on Thursday, down 78 cents, or 1.9%, to $41.14 a barrel on the New York Mercantile Exchange. It is down in eight of the past nine sessions and just hit its second six-session losing streak in the past month, falling to its lowest settlement since April 19.

Slumping crude prices have undermined recent optimism that oil markets finally had started to recover from a long period of oversupply, which caused prices to tumble below $27 early this year.

The recent declines also echoed the market's behavior last year, when crude prices rallied through the spring only to lose momentum and level off, before falling hard toward the end of the year.

Emerging markets and some other commodities like metals have continued to rally over the past few weeks, while the Dow Jones Industrial Average this month hit an all-time high. That broke a pattern earlier this year in which oil prices had been a big driver for elevating or dragging down many other asset prices.

Analysts point to an abundance of gasoline and other refined products that have slowed demand for crude even during a period of record demand from drivers. Refiners have placed in storage a near-record 500 million barrels of gasoline world-wide, according to Citigroup Inc. U.S. shale drillers have added more rigs to their fleets for six straight weeks.

The U.S. Energy Information Administration on Wednesday reported that crude stocks last week rose by 1.7 million barrels. Analysts had expected crude supply to fall by 1.6 million barrels.

Royal Dutch Shell PLC on Thursday reported a 93% drop in profit and rising debt for its most recent quarter, sending its shares down. Smaller peers such as France's Total SA and Spain's Repsol SA also reported lower profits Thursday, while rivals BP PLC and Statoil ASA announced similarly grim results earlier in the week.

Write to Timothy Puko at tim.puko@wsj.com and Erin Ailworth at Erin.Ailworth@wsj.com