NEW YORK — Oil closed at the lowest level in more than six years after US crude inventories climbed to the highest recorded for this time of year since 1930.
Crude supplies rose to 490.7 million barrels last week, 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 would be lifted, as it was. Futures maintained losses after the Federal Reserve raised interest rates for the first time in almost a decade.
Oil is trading near levels last seen during the global financial crisis, mainly because the Organization of Petroleum Exporting Countries effectively abandoned output limits to defend market share. An agreement between Iran and world powers also has raised the prospect of increasing shipments from the Persian Gulf nation.
"All the big themes right now are seen as bearish," said Mike Wittner, head of oil-market research in New York at Societe Generale SA. "We've been moving on sentiment, which is negative. There will have to be a strong bullish catalyst to change that."
West Texas Intermediate oil for January delivery dropped $1.83, or 4.9 percent, to close at $35.52 a barrel on the New York Mercantile Exchange. It's the lowest settlement since February 2009. The volume of all futures traded was 32 percent above the 100-day average at 3:01 p.m.
Brent for January delivery, which expired Wednesday, fell $1.26, or 3.3 percent, to $37.19 a barrel on the London-based ICE Futures Europe exchange. It was the lowest close since Dec. 24, 2008. The more-active February contract slid 3.5 percent to $37.39.
WTI futures for January closed at $1.67 a barrel below Brent after 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
Nationwide crude stockpiles rose 4.8 million barrels in the week ended Dec. 11. Crude supplies at Cushing, Okla., the delivery point for WTI futures and the nation's biggest oil-storage hub, rose 607,000 barrels to 60.1 million, the highest since May.
Crude imports climbed 3.6 percent to 8.31 million barrels, the highest since September 2013. US crude production rose by 12,000 barrels a day to 9.18 million in the week ended Dec. 11. Refineries reduced operating rates by 1.3 percentage points to 91.9 percent last week. A 0.8 percentage point gain was projected.