Investing.com -- U.S. crude futures fell considerably on Thursday extending losses from a massive sell-off in the prior session, as investors continued to digest a sizable inventory build from last week.
On the New York Mercantile Exchange, WTI crude for January delivery traded between $34.64 and $35.84 a barrel before settling at $34.97, down 0.56 or 1.56% on the session. With the sharp losses over the last two session, U.S. crude futures fell to near-seven year lows. Earlier this week, the front month contract for WTI crude dipped below $35 a barrel for the first time since 2008, as the aftershocks from OPEC's meeting at the start of the month continued to be felt. U.S. crude has closed in the red in eight of the last 10 trading days.
On the Intercontinental Exchange (ICE), brent crude for February delivery wavered between $36.95 and $37.92 a barrel before closing at $37.06, down 0.33 or 0.88%. North Brent Sea futures have closed in the green in only three sessions during the month of December.
When OPEC met in Vienna on December 4, the world's largest oil cartel intensified the prolonged downturn in oil prices when it decided to delay a possible move to reduce production at least six months until it meets next in June. Both the international and U.S. domestic benchmarks of crude have plunged by more than 15% since OPEC's decision.
A session earlier, WTI crude plunged more than 4% after the U.S. Energy Information Administration (EIA) said in its Weekly Petroleum Status Report that commercial crude oil inventories increased by 4.8 million barrels for the week ending on Dec. 11. At 490.7 million barrels, U.S. crude stockpiles remain near levels not seen for this time of year in at least the last 80 years.
At the same time, U.S. production increased moderately by 12,000 barrels per day to 9.176 million bpd. Still, U.S. output has fallen below 9.2 million bpd in four of the last five weeks. In June, daily production surged above 9.6 million bpd, reaching its highest level in 40 years.
Crude prices have slumped by more than 50% since OPEC rattled global markets with a strategic decision to leave its production ceiling above 30 million barrels per day. The tactic sparked a feisty battle for market share with U.S. shale producers, flooding markets with a glut of oversupply.
Elsewhere, Russia president Vladimir Putin said on Thursday that business activity nationwide has stabilized amid signals that the price of oil has bottomed. Putin opened his annual year-end press conference at the Kremlin by telling reporters that the Russian government had been accustomed to seeing oil prices near $100 a barrel, its level from 18 months ago. While Putin projected a 0.7% increase in GDP growth for 2016, the budget forecast is based on crude prices at $50 a barrel.
Before the semi-annual OPEC meeting, talks between Russia and Saudi Arabia on potential production cuts reportedly produced little headway.
Also on Thursday, U.S. congressional leaders indicated that a vote on a proposed $1.15 trillion omnibus spending bill will be held on Friday afternoon. On Wednesday, House of Representatives speaker Paul Ryan (R - Washington), said bipartisan leaders agreed on a tentative deal hours earlier to repeal a 40-year ban on U.S. oil exports.
An elimination of the export ban will create an estimated 1 million American jobs, resulting in an additional $170 billion for the U.S. economy, Ryan said in a statement.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, surged more than 0.85% to an intraday-high of 99.27.
The Federal Reserve's decision to abandon a seven-year zero interest rate policy on Wednesday is viewed as bullish for the dollar, as investors pile into the greenback to capitalize on higher yields.
Dollar-denominated commodities such as gold become more expensive for foreign purchasers when the dollar appreciates.
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