Oil prices hit their lowest in over 11 years on Wednesday, as the row between Saudi Arabia and Iran was seen making any cooperation between major exporters to cut output even more unlikely, and after a sharp rise in U.S. gasoline inventories.
Benchmark Brent crude futures were at $34.26 a barrel — down 5.93 percent — and at their lowest since early June 2004, having staged their largest one-day drop in percentage terms in nearly five weeks.
U.S. crude futures settled down $2, or 5.56 percent, at $33.97 a barrel — its worst settle since Dec. 19, 2008 — after already slipping 79 cents the previous day.
Last week, the U.S. added 10.1 million barrels of gasoline, the Energy Information Administration said. It added 900,000 the week before. However, U.S. crude inventories dropped by 5.1 million barrels last week.
"It's the biggest increase in gasoline supply since 1993," said John Kilduff, founding partner at Again Capital. "Gasoline prices are going to collapse"