Oil traded sharply lower in afternoon trading Friday, with U.S. crude falling below $40 a barrel for the first time since the global economic crisis. U.S. oil prices are headed for an eighth straight weekly decline, the longest weekly losing streak in nearly 30 years.

Oil extended declines, falling to its lowest levels since March 2009, after U.S. weekly rig counts rose for the fifth straight week, increasing by two oil rigs to a total count of 674 in the week ended Aug. 21, Baker Hughes said Friday. In 2014, U.S. oil rigs totaled 1,564.

Following the report, West Texas Intermediate crude, the benchmark for U.S. oil prices, fell 3 percent to $39.86 per barrel for October delivery on the New York Mercantile Exchange. On the London ICE Futures Exchange, Brent crude, the global benchmark for oil prices, dropped nearly 2.8 percent to $45.31.

A global stock market sell-off spurred by weak data from China's factory slowdown weighed on commodity prices Friday, fueling fears about slowing demand. The last time oil prices witnessed this kind of losing streak was in 1985, when crude sank to $10 from around $30 over a five-month period. At the time, the Organization of the Petroleum Exporting Countries raised output to counter an increase in production outside the group.

Julian Jessop, head of commodities research at Capital Economics, said “falling industrial commodity prices are feeding back into growing concerns about the health of the global economy.” 

“At face value, the plunge in commodity prices over the last year is consistent with a global recession as severe as that in 2008-09,” Jessop said in a note Friday. However, he added that he anticipates the negativity is overdone.

Oil prices tumbled to six-year lows earlier this week following an unexpected rise in crude stockpiles. U.S. crude inventories rose by 2.6 million barrels last week, the U.S. Energy Information Administration said Wednesday. At 456.2 million barrels, U.S. crude oil inventories remain near levels not seen for this time of year in at least the last 80 years.