January 27, 2016 10:30 AM, EST

Oil Resumes Decline as US Stockpile Surge Worsens Global Glut

Daniel Acker/Bloomberg News

Oil resumed its decline after U.S. industry data showed crude stockpiles increased, exacerbating a global glut.

Futures slid as much as 4.2% in New York. Inventories surged by 11.4 million barrels last week, the industry-funded American Petroleum Institute was said to report. If government data Jan .27 — which are forecast to show a 4 million-barrel gain — show an equivalent increase, it would be the largest gain in weekly reports since May 1996.

"Inventories are weighing evermore heavily on people’s minds," said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. "There’s no relief in sight, when it comes to inventories."

Crude is down about 16% this year as volatility in global markets adds to concern over brimming U.S. stockpiles and the outlook for increased exports from Iran after the removal of international sanctions. Independent American oil explorers are forecast to report 2015 losses totaling almost $14 billion amid the price collapse, according to data compiled by Bloomberg News.

Crude stockpiles at Cushing, Oklahoma, the delivery point for WTI and the biggest U.S. oil-storage hub, fell by 660,000 barrels last week, the API reported, according to a source familiar with the data.

The Energy Information Administration is projected to report that U.S. crude supplies increased for a third week, according to a Bloomberg survey. Analysts were split over whether gasoline stockpiles declined or gained.

Hess Corp. opened earnings season for U.S. explorers Jan. 27 reporting its first annual loss in 13 years as it cut spending to weather a prolonged slump in oil prices. It will be followed by peers including Murphy Oil Corp. and Anadarko Petroleum Corp.