Oil prices dropped to $78 a barrel aided by an increase in inventories and expectation of a slow US economy.

For September delivery, US crude dropped 16¢ to stand at $78.20 a barrel at 03.01 ET, while ICE Brent fell 14¢ to $77.45, according to Reuters.

US crude inventories soared over seven million barrels last week, which signalled weak demand and forced prices to stay near the bottom of the recent price range.