Crude oil is sliding

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Crude oil was down nearly 3% in morning trade on Wednesday.

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West Texas Intermediate crude oil futures in New York dropped to as low as $42.97 per barrel. Futures touched a $42-handle in the last week of October, but last traded near those levels for a considerable period in August.

The energy sector led declines on the S&P 500 in morning trade as the broader index remained largely unchanged.

It continues to be a story of oversupply, as markets await inventories data from the Energy Information Administration on Thursday that's expected to show crude stockpiles rose by one million barrels this week, according to a Reuters poll.

It would be the seventh straight week of a build in inventories. Data from the American Petroleum Institute on Tuesday showed that stockpiles rose by 6.3 million barrels to 486.1 million last week.

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Also on Tuesday, two major oil bodies gave forecasts for lower oil prices. International Energy Agency executive director Fatih Birol told the FT that weak demand coupled with oversupply would keep oil prices under $80 per barrel until 2020.

And, the Energy Information Administration's monthly short-term outlook lowered the 2016 estimate for oil prices to $51.31 from $53.57. The 2015 forecast was raised to $49.88 from $49.53.

This chart shows the drop in WTI on Wednesday:

fut_chart (5)

Finviz

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