Oil prices have dropped amid reports of another increase in US crude stocks that triggered concerns among investors over the ongoing global oversupply.
Brent crude futures dropped by 30 cents to $50.66 a barrel, while US West Texas Intermediate (WTI) crude futures plummeted by 28 cents to trade at $47.96 a barrel, reported Reuters.
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The American Petroleum Institute (API) reported that US crude oil inventories soared by 4.5 million barrels in the week ending 17 March to reach 533.6 million barrels. Analysts expected a 2.8 million barrel increase.
The official figures about the stock size will be released by US Energy Information Administration (EIA) later.
Since mid-2016, US oil production has increased by more than 8%. This rising production has been largely responsible to offset the production-cut efforts by OPEC countries to revive crude prices.
In a note to its clients, US bank Jefferies was quoted by Reuters as saying: "OPEC's market intervention has not yet resulted in significant visible inventory draw-downs, and the financial markets have lost patience."
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By GlobalDataThe note also observed that the output-cut may turn effective to absorb the glut if OPEC decides to extend the deal beyond June.
Analysts also predicted that the oil market may face a renewed crude oversupply in the following years if US shale producers continue to boost production and OPEC returns to full-capacity production.
