Oil dropped to a two-week low on speculation that a government report will show U.S. crude inventories climbed last week.

Futures tumbled 2.1 percent in New York. Stockpiles probably rose the 13th time in 15 weeks, keeping them more than 130 million barrels above the five-year average, a Bloomberg survey showed. The American Petroleum Institute will release its weekly data today while the Energy Information Administration will report on Wednesday. Supplies at Cushing, Oklahoma, the biggest U.S. storage hub, climbed to a record last month, according to the EIA.

Oil capped the biggest two-year loss on record in 2015 as the Organization of Petroleum Exporting Countries effectively abandoned production limits amid a global supply glut. Investors are assessing the impact of Saudi Arabia’s move to cut ties with Iran, while also watching measures by China to prevent the country’s financial-market volatility from weighing on a slowing economy.

West Texas Intermediate for February delivery fell 79 cents to settle at $35.97 a barrel on the New York Mercantile Exchange. It was the lowest close since Dec. 21. Prices slid 30 percent last year.

Brent for February settlement declined 80 cents, or 2.1 percent, to $36.42 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude closed at 45 cent premium to WTI.

Source : Bloomberg