Oil stocks rose by 14.3 million barrels last week, industry group the American Petroleum Institute showed late Wednesday. That was much more that the small increase that many economists had been expecting.
Traders and pumpers are hoarding oil in storage in an attempt to wait out low prices. But with more coming in every day, the balance between supply and demand isn't settling.
"The inventories were the trigger for the sharp correction lower," Carsten Fritsch, an oil analyst at Commerzbank in Frankfurt, said. "The focus is again back on the oversupply — the big question is for how long?"
North America's oil benchmark, WTI was off by about $2.50 a barrel in early trading, with the leading contract changing hands at $49.72 a barrel.
That was enough to drag the Canadian dollar lower, as the value of the loonie is closely tied to crude prices. The loonie was off by half a cent to 79.77 as stock markets opened.
Things weren't looking much rosier on the oil-heavy TSX, either. Canada's benchmark stock index, the S&P/TSCX composite index, was down about 50 points to 15,159.
More to comeSuggest a correction