Oil traded below $50 a barrel amid the most volatility since April 2009 as U.S. crude stockpiles climbed to the highest level in more than three decades.
Futures erased gains of as much as 1.2 percent in New York to extend a 8.7 percent drop on Wednesday, the biggest slide since November. Crude inventories expanded by 6.33 million barrels to 413.1 million last week, Energy Information Administration data show. The increase was almost double the median estimate in a Bloomberg News survey of analysts.
Rising U.S. stockpiles are contributing to a global glut that drove prices almost 50 percent lower last year. Oil's "new normal" is $60 to $70 a barrel in the next few years, according to Eurasia Group, a New York-based consultant. Supply will exceed demand by 2 million barrels a day in the first half of 2015, said Iranian Oil Minister Bijan Namdar Zanganeh.
"There's still an overriding concern about supply," Jonathan Barratt, the chief investment officer at Ayers Alliance Securities in Sydney, said by phone. "It's all about finding a base and the volatility that we've seen shows it's trying to do that. As soon as we get any feeling about weak economics, that's going to hurt the price."
West Texas Intermediate for March delivery fell as much as $1.09, or 2.3 percent, to $47.36 a barrel in electronic trading on the New York Mercantile Exchange and was at $47.63 at 2:18 p.m. Singapore time. The contract lost $4.60 to $48.45 on Wednesday, halting the largest four-day rally since January 2009. The volume of all futures traded was about 9 percent above the 100-day average.
Brent for March settlement dropped as much as $1.09, or 2 percent, to $53.07 a barrel on the London-based ICE Futures Europe exchange. It decreased $3.75 to $54.16 on Wednesday. The European benchmark crude traded at a premium of $5.66 to WTI.