Oil prices have dropped due to excess supply concerns amid a slowing global economy.

Brent crude futures LCOc1 fell 45 cents at $33.96 a barrel, while the US West Texas Intermediate (WTI) crude futures CLc1 dropped 35 cents and traded at $31.80 per barrel, Reuters reported.

CMC Markets chief market analyst Ric Spooner told the news agency: "The basic overriding position in the oil market at the moment is that the global production exceeds global demand by quite a wide margin."

"The basic overriding position in the oil market at the moment is that the global production exceeds global demand by quite a wide margin."

The US Department of Energy data showed that crude inventories in the country increased 3.5 million barrels last week to more than 507 million.

Expectations of major OPEC and non-OPEC producers joining Saudi Arabia, Russia, Venezuela and Qatar’s proposal to freeze output at January levels also faded.

The proposal was in place last week as the producers aimed to boost oil price that declined to a 12-year low in January 2016 due to excess supply.

Iran rejected the proposal, while Iraq, which is pumping more crude into the markets globally, said it supports the proposal but will continue to produce at high levels.

The US Energy Department said that gasoline demand in the US during the week ending 19 February stood at 9.06 million barrels per day (bpd), representing an increase from 8.6 million bpd in the week ending 22 January.