Oil tumbled after U.S. crude inventories climbed to the highest level for this time of year since 1930.

Crude supplies rose to 490.7 million barrels, leaving stockpiles more than 120 million barrels above the five-year seasonal average, government data showed. The discount of crude in New York to global marker Brent earlier dropped to an 11-month low amid expectations that a 40-year-old ban on most American crude exports will be lifted. Futures maintained losses after the Federal Reserve raised interest rates for the first time in almost a decade in a widely telegraphed move.

West Texas Intermediate oil for January delivery dropped $1.30, or 3.5 percent, to $36.05 a barrel at 2:02 p.m. on the New York Mercantile Exchange. The U.S. benchmark slid below $35 a barrel Monday for the first time since February 2009. The volume of all futures traded was 29 percent above the 100-day average.

Brent for January delivery, which expires today, fell $1.14, or 3 percent, to $37.31 a barrel on the London-based ICE Futures Europe exchange. The more-active February contract settlement slid 2.8 percent to $37.56.

WTI futures for January were $1.26 a barrel below Brent after earlier shrinking to as little as 20 cents, the smallest discount in a year. The WTI February contract earlier traded at a premium to the international benchmark for the first time in five years.

Source : Bloomberg