Oil prices have plummeted by nearly 1% as the US continues to increase production.

Investors are also waiting for OPEC’s first report on compliance to output cut that started from 1 January this year.

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Global benchmark Brent crude futures fell by 45 cents to reach $56.25 a barrel, while West Texas Intermediate (WTI) crude futures were down by 41 cents to get traded at $53.45, reported Reuters.

PVM Oil Associates senior analyst Tamas Varga was reported by the news agency as saying: “Bulls are liquidating ahead of the release of the monthly OPEC report due out shortly and yet another increase in US rig counts is also playing part in the weakness.”

"Bulls are liquidating ahead of the release of the monthly OPEC report due out shortly and yet another increase in US rig counts is also playing part in the weakness."

In the last month, US oil drillers have added the largest number of oil rigs since 2012.

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A weekly report of Baker Hughes stated that currently there are 591 rigs in the US, the highest amount since October 2015.

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The US continued to increase its production since the OPEC countries and Russia decided to reduce daily output by 1.8 million barrels a day to reduce global oversupply.

OPEC is scheduled to publish its first report evaluating the deal compliance.

Kuwait’s oil minister previously stated that the compliance rate among OPEC countries was 92%, while the rate was found to be around 50% among the non-OPEC countries.