Crude oil fell to the lowest level in almost six years in New York as rising production swells U.S. stockpiles.
West Texas Intermediate dropped as much as 2 percent, widening its discount to Brent to the most in a month. U.S. crude supplies rose to the highest level in weekly data going back more than three decades, the Energy Information Administration said Wednesday.
Oil has collapsed about 40 percent since the Organization of Petroleum Exporting Countries decided to maintain its output target on Nov. 27, challenging non-OPEC producers to curb their supplies first to alleviate a global surplus. U.S. production rose to the highest since at least 1983 last week, signaling that non-OPEC output hasn’t yet faltered.
“U.S. stockpiles are still very high and the fundamentals are weak,” said Gene McGillian, a senior analyst at Tradition Energy in Stamford, Connecticut. “The market will continue to come under pressure. There is really not anything bullish out there.”
West Texas Intermediate for March delivery slipped 84 cents, or 1.9 percent, to $43.61 a barrel at 11:07 a.m. on the New York Mercantile Exchange. Prices fell as low as $43.58, the lowest since March 12, 2009. The volume of all futures traded was about 18 percent below the 100-day average for the time of day.
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