08/19/2015 04:51 EDT | Updated 08/19/2016 05:59 EDT

Oil Prices Hit Six Year Low On Higher Stockpiles

CALGARY — The price of oil hit a six-year low Wednesday as U.S. stockpiles posted an unexpected increase, bringing further pain to Canadian oilsands producers.

The price of West Texas Intermediate, the North American oil benchmark, went as low as US$40.60 in morning trading after a U.S. Energy Information Agency report showed a 2.6-million-barrel increase in American crude oil inventories.

In a research note, Desjardins Capital Markets said the analyst consensus called for a 400,000 barrel drop in inventories.

The EIA also revised downward its price outlook for oil by US$6 a barrel for 2015 and US$8 a barrel for 2016 compared with last month's forecast. The agency now sees an average of US$49 a barrel for 2015 and US$54 a barrel in 2016.

The drop in oil prices comes as Canadian producers struggle with a high discount to the U.S. benchmark after a major shutdown at a refinery that processes  Canadian heavy oil.

A report Monday by JBC Energy said oilsands viability is "on the edge" in current markets, with producers on average seeing profits of no more than US$5 a barrel.



Also on HuffPost

What Gets More Expensive When Oil Prices Rise