NEW YORK (BLOOMBERG) - Oil is already trading at the lowest level in a decade in New York, as far as one-year contracts go, signaling traders don't expect much reprieve from the current rout.

West Texas Intermediate oil for delivery in September 2016 touched US$47.90 a barrel on the New York Mercantile Exchange on Wednesday (Aug 19), the lowest intraday price for a contract out 12 months since February 2005.

"This says that the price prospects for 12 months from now are bleak as we speak," John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund, said by phone. "The curve is a representation of the collective wisdom of the market. It's a best guess of market conditions 12 months from now."

Crude for next month settled at a six-year low in New York and approached the US$40-a-barrel mark after the Energy Information Administration reported a surge in US inventories. Citigroup said the U.S. benchmark oil price could drop to US$32 on the persisting supply glut. The EIA said crude supplies rose 2.62 million barrels last week.

Oil has slumped more than 33 per cent since this year's closing peak in June amid signs the surplus that drove prices into a bear market will persist. Leading OPEC producers are maintaining output while US crude stockpiles remain almost 100 million barrels above the five-year average.

West Texas Intermediate for September delivery, which expires Thursday, fell as much as 25 cents to US$40.55 a barrel on the New York Mercantile Exchange and was at US$40.57 at 8:14 am Sydney time on Thursday (Aug 20). The contract dropped US$1.82 to US$40.80 on Wednesday, the lowest close since March 2, 2009.

Brent for October settlement slid US$1.65, or 3.4 per cent, to US$47.16 a barrel on the London-based ICE Futures Europe exchange on Wednesday. The European benchmark crude ended the session at a premium of US$5.89 to WTI.