A double-barreled punch of disappointing U.S. data and a bearish report from the International Energy Agency has sent oil reeling, with the selling pressure unlikely to ease anytime soon.
After trading as high as $117.38 in mid-February, Brent crude plunged on Friday to an eight-month low near $101. West Texas Intermediate, or U.S. crude, has fared no better: It plunged from about $99 in late February, to trade just above $91, its weakest since late December.
The slide in black gold has coincided with a broader shake-out in commodities, with bullion officially sliding into bear market territory after a brutal start to 2013.
In theory, ongoing geopolitical turmoil should justify higher prices. Yet energy analysts say the market has grown increasingly jittery over a spate of bearish economic figures—and the latest chapter of Europe's ongoing debt troubles—that bode poorly for global demand.
"We continue to get weaker-than-expected data out of the U.S.,"said George Davis, chief FX technical strategist at RBC Capital Markets in Toronto. "That in part is what's feeding into the move lower in crude oil prices, and also revolves around the theme of an economic slowdown."
March retail sales and April consumer confidence were far weaker than expected, triggering concerns that a loss of purchasing power in the world's largest consumer of oil could lead to a spiral in global demand for oil. The figures came on the heels of a March employment report that saw the economy create a paltry 88,000 jobs.
Noting that the global economy appears to be following a recent trend of strength in the winter that leads to deceleration in the spring, Davis said commodities were being impacted by fears of a pullback.
"People are very concerned that we're about to embark on a very similar trajectory, and are more cautious from that perspective," he added.
In a widely circulated report on Thursday that helped accelerate oil's slide, the IEA said that crude supply risk "remains elevated" given tensions in oil-producing nations like Libya, Nigeria, Syria and Iran.Still, the agency appeared more preoccupied with what it called a "weak macroeconomic environment," and global oil demand that the IEA expects to top out shy of 91 million barrels per day in 2013.
Some analysts say the drivers behind crude's weakness could run deeper than just the macro outlook, with these factors dragging oil prices into a downdraft.
The widening adoption of natural gas—particularly in the U.S., where the energy source is both plentiful and relatively inexpensive—is cutting into demand for diesel, a key crude product widely used in transportation.
The IEA noted that "remarkably, [diesel] demand growth trailed that for gasoline last year, reversing earlier trends" and could repeat that feat this year.
"Natural gas can replace diesel," said Richard Hastings, senior macro strategist at Global Hunter Securities. "Unfortunately, it's a negative for gas demand."
(Read More: Can Natural Gas Become the New Gasoline?)
The increasing fuel economy of U.S. vehicles and the country's growing energy production "absolutely suppresses petroleum demand,"Hastings said. "Massive secular themes are playing into it."