This is not how October was supposed to play out for the oil market.
After starting the month at nearly four-year highs, bolstered by looming U.S. sanctions on Iran's crude exports, oil prices posted their the biggest monthly drop in more than two years.
U.S. West Texas Intermediate crude dropped 10.8 percent in October, its steepest decline since July 2016. WTI is now more than $11 below its Oct. 3 high of $76.90.
The picture is nearly as ugly for Brent crude, the international benchmark for oil prices. It has also tumbled more than $11 from its Oct. 3 high at $86.74, falling nearly 9 percent this month. That's also the worst drop since July 2016.
For a sense of perspective, July 2016 was two months before a meeting that paved the way for an historic deal between OPEC, Russia and other producers to cut output. At that point, the market remained deeply skeptical that OPEC would reach a deal to tackle oversupply. Saudi Arabia was pumping at then-record levels, and U.S. drillers were adding rigs to American oil fields.
There's at least one similarity between 2016 and 2018: The oil market experienced strong gains in the first six months of the year before hitting a volatile patch in the second half.
There's little doubt that much of the oil market's problems this month are tied to the broader sell-off in equities, which has seen investors shed risk assets like crude futures. Both stock markets and crude futures jumped in early October before selling off sharply.
"The correlation has been about 80 percent over the course of the month" between equities and crude, said John Kilduff, founding partner at energy hedge fund Again Capital. "This is the highest correlation I've seen in quite some time."
Both the equity and crude markets are bedeviled by a slowdown in global economic growth, rising U.S. interest rates and worries about a prolonged trade dispute between the United States and China. A stronger U.S. dollar is also buffeting oil, Kilduff said.