Oil prices hit an 11-year gulch on Wednesday, as the scrap between Saudi Arabia and Iran was seen making any cooperation between major exporters to cut output even more unlikely, and after a sharp rise in U.S. gasoline inventories.
Last week, the U.S. added 10.1 million barrels of gasoline, the Energy Information Administration said. It added 900,000 the week before. However, U.S. crude inventories dropped by 5.1 million barrels last week.
The outrage over Saudi Arabia's execution of a Shi'ite cleric has stripped nearly 8% from the price of oil in the last three trading days alone and has killed speculation that OPEC members might agree on production cuts to lift prices.
Oil has slumped from above $115 U.S. in June 2014 as shale oil from the United States has flooded the market, while falling prices have prompted some producers to pump even harder to compensate for lower revenues and to keep market share.
Adding to this oversupply, Iranian oil exports are widely expected to increase in 2016 as Western sanctions against Tehran for its alleged nuclear weapons program are likely to be lifted.
