Oil prices slid down on Wednesday as the US Energy Information Administration (EIA) reported that crude inventories rose to a staggering 2.5 million barrels last week that sparked worries about supply glut anew.
US crude collapsed by about 3% on the unexpectedly large inventory build as October West Texas Intermediate crude gave up $1.33, or 2.8%, to trade at $46.77 per barrel, the lowest settlement since August 17.
Gasoline stocks and distillate stockpiles rose 36 000 and 120 000 barrels respectively, reported by EIA, which drove down oil prices that has been in the green zone for the past two weeks amid speculation of an output freeze by OPEC and support from Iran.
Global benchmark Brent crude dropped 91 cents, or 1.8%, to trade at $49.05 a barrel, the lowest finish since August 15.
The dollar climbed in thin trading on Wednesday as investors eye clarity on the near term path for interest rates this week.
A firmer dollar stood tall versus major rivals and was last up 0.3% to close at 94.835 ahead of speech of Federal Reserve Chair Janet Yellen this Friday.
The greenback was up 0.2% against the Japanese yen, closing at 100.47 and 0.5% stronger than euro, finishing at 1.1250.
Sterling dipped 0.2% to close at $1.3172 after touching a three week high overnight of $1.3210.
Gold futures extended its stay in the red zone on Wednesday as it slipped 1.2% and logged to its lowest finish in about a month amid shifting expectations on Fed’s interest rate policy.
December gold GCZ6 fell $16.40 to settle at $1 329.70 per ounce, the lowest for the contract since July 26.
The SPDR Gold Trust was down 1% while the VanEck Vectors Gold miners sank 5.5%.
December silver SIZ6 also dived as it shed 37.7 cents, or 2% at $18.688 an ounce.