Oil slips to $42, a fresh 6-year low

03/18/2015 11:19 EDT | Updated 05/18/2015 05:59 EDT
Oil continued its slide on Wednesday, sinking to $42 US a barrel at mid-morning and dragging down the Canadian dollar.

West Texas Intermediate, a key North American crude futures contract, was down $1.12 to $42.33 US a barrel, a fresh six-year low. Western Canada Select, a key Canadian contract, slipped another $1.17 to $28.54 US, auguring more bad times for the Canadian oilpatch.

Oil has been losing ground for seven trading sessions, amid reports that production continues to rise and oil storage tanks are approaching capacity. Late Tuesday, industry group the American Petroleum Institute said U.S. crude stockpiles rose by 10.5 million barrels in the week ended March 13.

The U.S. Energy Information Administration should have fresh data later Wednesday on oil storage levels.

The crude-sensitive Canadian dollar sank as low as 77.93 cents US and was trading at 78.13 cents US at mid-morning.

Stocks also were racking up losses in both Toronto and New York as investors waited for the U.S. Federal Reserve's latest interest rate pronouncement.

The Fed will release its decision at 2 p.m. ET, and traders will focus on whether it says it can be "patient” in its timing of a rate hike.

If the word "patient" is gone from its language, the guessing is that rates will rise in June.

The TSX was down 30 points at 14,867, hit by falling energy stocks and news of fresh layoffs at Talisman, Athabaska Oil and Nexen.

The Dow fell 58 points to 17,790 and the S&P 500 was down five points to 2,769. The Nasdaq was off nine points to 4928.