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Oil Slides to Near 6-Year Low; Saudi Arabia Holds Firm Despite Supply Glut

Oil fell from the lowest closing price in almost six years amid signs that Saudi Arabia’s new king will maintain its production policy, bolstering speculation that a global glut will persist.

Futures dropped as much as 2.7 percent in New York, extending last week’s 6.4 percent slide. King Salman, who took the Saudi throne on Jan. 23, pledged to maintain the policies of his predecessor. U.S. inventories climbed to the highest level for December since 1930, the American Petroleum Institute reported. Greek voters handed election victory to Syriza, a party that’s pledged to end austerity and renegotiate an international bailout.

Oil slumped almost 60 percent since June as the Organization of Petroleum Exporting Countries resisted calls to cut output and the U.S. pumped at the fastest pace in more than three decades. Saudi Arabia, the world’s biggest exporter, has chosen not to reduce supply and counts instead on lower prices to stimulate demand, according to Mohammad Al Sabban, an adviser to the kingdom’s petroleum minister from 1988 to 2013.

“All the indications from the Saudis point to no major policy changes,” Ole Hansen, an analyst at Saxo Bank A/S in Copenhagen, said by phone. “The market’s focus remains on supply that isn’t being met by demand.”