The price of a barrel of the benchmark North American oil known as WTI lost almost $3 to trade at $50.23 around midday on Wednesday. That drop came after a four-day stretch dating back to late last week when oil had run from $44 to more than $52, a gain of about 18 per cent.
But that appears to be over — at least for now — as traders focused on the long term again, where the economics still point to huge oversupply in the market.
A report out of Washington from the Energy Information Administration (EIA) on Wednesday sparked the decline as it said U.S. crude inventories jumped by six million barrels last week to 413 million, more than analysts had forecast and the highest level on record dating back to 1982.
"If the market was looking for something to try and extend the four-day rally, it was certainly not" in the EIA data, said Sal Umek, senior associate at the Energy Management Institute in New York.
The sell-off in oil was enough to let the wind out of the loonie's sails, as the Canadian dollar lost almost a penny to trade at 79.61 cents US.
The oil-heavy TSX fared little better, shedding about 50 points to 15,012 early in the afternoon.