Oil market slides as US crude reserves increase

World oil prices fell heavily on Wednesday, with New York crude sliding below USD 49, as swelling US inventories added to the global supply glut.
US benchmark West Texas Intermediate (WTI) for March delivery tumbled USD 1.22 to USD 48.80 a barrel compared with Tuesday's close.
Brent North Sea crude for March dropped USD 1.70 to USD 54.73 a barrel in late afternoon London deals.
"The latest inventories data has reminded investors that the supply glut is here to stay for the time being," said analyst Fawad Razaqzada at trading site Forex.Com.
The US government's Department of Energy (DoE) reported that commercial crude reserves rose 4.9 million barrels in the week ending February 6.

Stockpiles were "at the highest level for this time of year in at least the last 80 years", the DoE added in a statement.

Market expectations had been for a smaller gain of 3.6 million barrels, according to analysts polled by Bloomberg News.
"The 4.9-million-barrel increase in weekly oil inventories was not only more than expected but was also significantly higher than the build of 1.6 million barrels that the American Petroleum Institute (API) reported," Razaqzada told AFP.
"Consequently, WTI prices have taken another leg lower."
Rising stockpiles indicate weaker demand in the world's biggest economy and top oil-consuming nation, and therefore tend to depress price levels.

"Crude oil prices extended declines following the announcement with WTI front month futures plunging ... Below USD 49 per barrel," said Sucden analyst Myrto Sokou.
"The downside momentum continues in the oil market as high crude oil inventories verify the slowdown in the oil demand."
The market was also pulled lower by the strong greenback, which makes US-priced crude more expensive for buyers using weaker currencies and therefore tends to dent demand.
Oil prices have been under pressure for months, plunging about 60 percent to just over USD 40 a barrel between June and the end of January, dragged down by a strong dollar and abundant global supplies.

They have recovered some of their lost ground in recent weeks as the number of drilling rigs falls and energy firms begin to cut investment.