U.S. oil price plummeted below 27 U.S. dollars a barrel Wednesday as the market continued to be bewildered by a supple glut amid fears about the pace of global growth.
The West Texas Intermediate for February delivery moved down 1.91 dollars, or 6.71 percent, to settle at 26.55 dollars a barrel on the New York Mercantile Exchange, the lowest level since May 2003.
The Brent crude for March delivery decreased 88 cents to close at 27.88 dollars a barrel on the London ICE Futures Exchange.
Persistent oversupply, bloated inventories and a slew of negative economic news pressured prices so that crude oil touched 12-year lows, the International Energy Agency (IEA) said in a report Tuesday.
U.S. Energy Information Agency (EIA) is scheduled to report U.S. inventory data Thursday. Traders expected to see another build-up of the supply.
Thanks to the U.S. shale oil revolution, American oil production has almost doubled in the past six years. There is no sign that U.S. shale oil producers started to cut production in face of the plunging prices.
Apart from high production levels by the United States, the market has been awash with supplies from the Organization of the Petroleum Exporting Countries (OPEC).
The cartel, accounted for around 40 percent of the global crude output, last year refused to slash output as it seeks to maintain market share.
Traders expected that Iran, an OPEC member, will quickly start to export more crude when sanctions are lifted.
OPEC crude output eased by 90,000 barrels per day (kb/d) in December to a still-lofty 32.28 million barrels per day, including newly rejoined Indonesia. Iran, now relieved of sanctions, insists it will boost output by an immediate 500 kb/d, according to IEA's report.
