Crude-oil futures slumped Wednesday, wiping out earlier gains as U.S. data confirmed an unexpected jump in crude inventories.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in February fell $1.64, or 2.8%, to $55.48 U.S. a barrel. February Brent crude on London’s ICE Futures exchange lost $1.74, or 2.8%, to $59.95 U.S. a barrel.
On Wednesday, the U.S. Energy Information Administration said commercial crude inventories rose 7.3 million barrels from the previous week to 387.2 million barrels. On average, analysts were looking for a decrease of 1.8 million barrels.
Late Tuesday, the American Petroleum Institute said its data showed a 5.4-million-barrel gain in U.S. crude stockpiles for the week ended Dec. 19. Rising U.S. oil production due to the shale boom has been largely responsible for the glut in oil markets, and a large buildup in U.S. supply typically weighs on oil prices.
The Organization of the Petroleum Exporting Countries, led by its largest producer, Saudi Arabia, has refused to intervene to support oil prices. That could mean high-cost producers will be driven out of the market first.
The oil cartel, however, risks a fall in revenue while waiting for other producers to blink first.
