Oil prices retreat amid supply glut

Oil prices retreated Wednesday as U.S. crude inventories increased to a historic high.

The Energy Information Administration (EIA), the Energy Department's statistical arm, said Wednesday for the week ended Feb. 6, U.S. crude stockpiles increased 4.9 million barrels to 417. 9 million, the highest level since 1982. That was 56.5 million barrels more than a year earlier.

Meanwhile, inventories at Cushing, Oklahoma, the delivery point for the contract, gained 1.2 million barrels to 42.6 million barrels.

U.S. crude production climbed 49,000 barrels a day to 9.226 million last week, the highest in weekly estimates that started in January 1983, according to the EIA data.

On Wednesday, the International Energy Agency (IEA) said in its medium-term oil market report that the oil prices would recover from the recent low levels, but "the market does not seem to be expecting prices to revisit earlier highs any time soon."

The IEA trimmed not only its demand estimates but also its supply forecasts. "For the next few years, the global oil market looks set to begin a new chapter of its history, with markedly changing demand dynamics, sweeping shifts in crude trade and product supply, and dramatically different roles for OPEC and non- OPEC producers in regulating upstream supply," the IEA said.

Light, sweet crude for March delivery lost 1.18 U.S. dollars to settle at 48.84 dollars a barrel on the New York Mercantile Exchange, while Brent crude for March delivery moved down 1.77 dollars to close at 54.66 dollars a barrel.