Oil neared the lowest level since February 2009 as U.S. crude inventories surged and the Federal Reserve raised interest rates for the first time in almost a decade.
Futures fell as much as 2.5 percent in New York after Wednesday’s 4.9 percent decline. U.S. stockpiles climbed to 490.7 million barrels last week, the highest level for this time of year since 1930, the Energy Information Administration reported yesterday. Goldman Sachs Group Inc. warned of “high risks” that oil may fall even lower as supplies swell. The Fed’s decision bolstered the dollar, diminishing the appeal of commodities denominated in the U.S. currency.
Oil is trading near levels last seen during the global financial crisis on signs a record surplus will worsen. The Organization of Petroleum Exporting Countries earlier this month effectively abandoned production limits to defend market share, while the White House on Wednesday announced its support for a deal reached by congressional leaders that would end the nation’s 40-year restrictions on crude exports.
” West Texas Intermediate for January delivery slipped 50 cents, or 1.4 percent, to $35.02 a barrel at 2:27 p.m. on the New York Mercantile Exchange. Prices have dropped 35 percent this year and are heading for a second annual decline.
Brent for February delivery sank 25 cents, or 0.7 percent, to $37.14 a barrel on the London-based ICE Futures Europe exchange. The January contract expired Wednesday after decreasing to $37.19, the lowest close since December 2008.
Source : Bloomberg