Investing.com - West Texas Intermediate oil futures extended losses on Wednesday, after data showed that oil supplies in the U.S. rose unexpectedly last week.
Crude oil for delivery in February on the New York Mercantile Exchange slumped $1.40, or 3.7%, to trade at $36.47 a barrel during U.S. morning hours. Prices were at around $36.62 prior to the release of the inventory data.
The U.S. Energy Information Administration said in its weekly report that crude oil inventories increased by 2.6 million barrels in the week ended December 25. Market analysts' expected a crude-stock drop of 2.5 million barrels, while the American Petroleum Institute late Tuesday reported a supply gain of 2.9 million barrels.
Supplies at Cushing, Oklahoma, the key delivery point for Nymex crude, rose by 892,000 barrels last week, above forecasts for a gain of 600,000 barrels.
Total U.S. crude oil inventories stood at 487.4 million barrels as of last week, remaining near levels not seen for this time of year in at least the last 80 years.
Gasoline inventories increased by 1.0 million barrels, compared to expectations for a gain of 0.9 million barrels, while distillate stockpiles rose by 1.8 million barrels.
Trading volumes are expected to remain light in the final few days of the year, reducing liquidity in the market which could result in exaggerated moves.
Nymex oil futures are down nearly 32% in 2015 amid worries over ample domestic supplies. Prices fell to $34.29 earlier this month, the lowest since February 2009.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for February delivery shed $1.11, or 2.95%, to trade at $36.68 a barrel.
Brent oil prices are on track to post an annual decline of 36% this year, as oversupply concerns dominated market sentiment for most of the year. Prices slumped to $35.98 on December 22, a level not seen since July 2004.
Oil futures have fallen sharply this month after the Organization of the Petroleum Exporting Countries failed to agree on output targets to reduce a glut of oversupply on global energy markets.
Global crude production is outpacing demand following a boom in U.S. shale oil and after a decision by OPEC last year not to cut production in order to defend market share.
Meanwhile, Brent flipped back to a premium over the West Texas Intermediate crude contract, after U.S. oil surpassed prices on the global market for the first time in four years last week.
U.S. crude has been firmer relative to Brent recently, on signs that the U.S. oil market is likely to grow tighter following Congress' decision to lift a 40-year old ban on domestic oil exports, while a global glut gets worse in 2016 due to soaring production in Saudi Arabia and Russia.
Oversupply issue will be exacerbated further once Iran returns to the global oil market early next year after western-imposed sanctions are lifted. Analysts say the country could quickly ramp up production by around 500,000 barrels, adding to the glut of oil that has sent prices tumbling.