US crude prices declined on Wednesday, as inventories reached a new record high for a tenth straight week, bringing the global supply glut back in focus.
West Texas Intermediate (WTI) futures declined more than 2.5 percent to $42.58 a barrel, slightly above the recent six-year low of $42.03.
US crude inventories climbed 9.6 million barrels to a new record of 485.5 million barrels last week, the Energy Information Administration (EIA) reported on Wednesday. That was the tenth consecutive week crude inventories had reached a record high. Analysts had forecast a stock buildup of 4 million in the week ending March 13 after stockpiles rose by 4.5 million the previous week.
Global benchmark Brent crude was better supported following the news, although it too declined 2.2 percent to $53.44 a barrel.
The markets were trading choppy ahead of the Federal Reserve’s interest rate statement and press conference, which is scheduled for 2:00 EST (18:00 GMT). Energy prices could decline further if the Fed removes the word “patient” from its official rate statement referring to the period of time before raising interest rates. That would support another dollar rally and raise expectations for a June rate hike.
The US dollar index, which tracks the performance of the dollar against a trade-weighted basket of currencies, had consolidated at 99.40 ahead of the Fed announcement. The index powered to new 12-year highs last week, climbing past the 100.00 level.