Crude oil prices plunged anew on Wednesday, taking the loonie along for the ride, following the release of U.S. inventory figures that showed oil supplies building at a time when the market was expecting drawdowns.

Crude for January delivery closed down $1.83, or 4.9 per cent, to $35.52 US a barrel. The drop followed news from the U.S. Energy Administration that crude oil supplies in the U.S. rose by 4.8 million barrels last week. Analysts had been expecting supplies to drop by 1.5 million barrels.

Oil had already been trending lower after another supply report — this one from the American Petroleum Institute — showed a similar and unexpected rise in U.S. crude stockpiles.

Prices hit multi-year lows on Monday near $35 US a barrel as the supply of oil continued to outpace demand and the global economy showed new signs of weakness. Prices moved higher on Tuesday but reversed course Wednesday once the new supply figures were released.

Loonie at 11-year low

The beleaguered Canadian dollar took another hit from the new fall in oil prices. The loonie lost a quarter of a cent to close at 72.54 cents US. That's its lowest level since May 2004.

At official exchange rates, that pushes the cost of a U.S. dollar to almost $1.38 Cdn. But the actual cost of buying U.S. currency at your neighbourhood bank will be more than $1.40 for each U.S. dollar.

Lower crude prices weren't the only thing pressuring the loonie. The U.S. dollar gained against a broad basket of currencies as the Federal Reserve, as expected, raised its key overnight lending rate Wednesday afternoon by a quarter of a percentage point — the first increase in almost 10 years.   

Other commodities also fell Wednesday. The price of natural gas hit a new 16-year low, dropping 3.2 cents to $1.79 US per million British thermal units. Mild weather in many parts of the U.S. is limiting gas consumption. 

Canadians who heat their homes with gas stand to benefit from the recent price drop. Enbridge Gas in Ontario, for instance, has applied to lower gas rates in the new year. If approved, consumers will likely see their gas bills drop by about five per cent as of Jan. 1.