US crude falls to lowest level in 10 months

By Ovunc Kutlu

NEW YORK (AA) - U.S. crude plummeted Wednesday to its lowest level in 10 months after the country's oil output showed another weekly increase.

American benchmark West Texas Intermediate (WTI) fell to $42.08 at 1.55 p.m. (1755GMT) -- its lowest level since Aug. 11 last year.

The sudden decline came after the Energy Information Administration said crude output increased 20,000 barrels per day (bpd) last week to 9.35 million bpd. That marked the 16th time U.S. output has risen in the last 18 weeks.

The current production level in the U.S. is now up more than 10 percent from 8.47 million bpd in October.

A decline in the WTI price come despite a decreased in the country's commercial crude and gasoline inventories.

"Oil prices initially rose a little today as falls in stocks of both crude and gasoline boosted sentiment slightly," Thomas Pugh, a commodities economist at London-based Capital Economics, said in a note.

"However, continued increases in production and lower demand for crude from refineries counteracted some of the positive impact of lower stocks," he added.

International benchmark Brent crude also lost around 3 percent Wednesday to fall as low as $44.37 -- its lowest level since Nov. 14.