U.S. crude oil extended its five-day plunge on Thursday, wiping out this year’s gains and falling toward the psychologically important $60 level.

U.S West Texas Intermediate crude futures were trading at $60.26 a barrel by 4:18 p.m. ET, after the close of Thursday’s session. WTI ended the final trading session of 2017 at $60.42. Brent crude, the international benchmark for oil prices, gave up all of 2018’s gains earlier this week. It was last trading at $64.24, down nearly 4 percent year to date.

Rising U.S. output and crude stockpiles piled pressure on oil prices over the past two sessions, after commodities were swept up in a crushing stock market sell-off Friday and Monday. The latest leg lower for oil futures coincided with a 1,000-point plunge  in the Dow Jones industrial average heading into the close of trading on Thursday.

Creating further headwinds, the dollar index has risen back above 90 cents just as the inverse relationship between the greenback and oil futures reasserts itself. A rising U.S. currency makes dollar-denominated commodities like oil more expensive to buy and more profitable to sell for holders of other currencies. “Crude oil prices have gotten knocked around by the dollar for the better part of two months now,” John Kilduff, partner at energy hedge fund Again Capital told CNBC’s Squawk Box on Thursday. Kilduff says U.S. crude is posed for a sharp drop back into the mid-$50 range given the dollar strength and bearish supply dynamics underpinned by rising U.S. output.

Government data released last week showed U.S. oil production surpassed 10 million barrels a day in November, breaking through that level for the first time since 1970. Preliminary weekly output figures suggest drillers pumped 10.25 million barrels a day in the week through Feb. 2, which would firmly establish the United States as the world’s second biggest producer. The previous No. 2, Saudi Arabia, has been pumping below 10 million barrels a day while it continues to spearhead OPEC’s deal with Russia and other producers to limit output. Only Russia, which is capping production alongside OPEC, pumps more than the United States.

Oil prices got a brief boost on Wednesday after Ineos announced the North Sea Forties pipeline, Britain’s most important oil and gas line, was shutting down for the second time in two months. However, Ineos quickly brought the line back into service. Some analysts have been warning for weeks that oil prices are at risk of retracing gains, pointing to extreme financial positioning. Traders have taken out a record number of bets that oil prices will keep rising. Meanwhile, wagers that crude will sink have dried up. This extreme positioning often encourages profit-taking and can spark sudden reversals as traders who borrow to purchase crude futures scramble to cover their position when prices start falling.