The price of Brent crude oil fell towards $53 a barrel, as US crude stocks surged to a new record high.
Reuters reported that Brent for May delivery deminished 47 cents to $53.04, and US crude for April delivery dropped to $42.05 a barrel.
Data from the American Petroleum Institute (API) revealed that US crude inventories increased by 10.5 million barrels to 450 million in the week commencing 13 March.
API said crude stocks at the Cushing, Oklahoma, delivery hub increased by three million barrels.
The US Energy Information Administration will unveil the official inventory data later today.
OptionsXpress market analyst Ben LeBrun was quoted by the news agency as saying: "Whether the API data is right or wrong, it is still about market expectations or missed expectations."
Traders are also waiting for the US Federal Reserve’s policy making committee to outline its monetary policy objectives.
Some recovery in Libya’s output, and plans by Iran to increase oil production once Western sanctions are lifted, have heightened oversupply concerns for oil.
The possibility of a nuclear agreement that may end sanctions against Iran will enable Tehran to send further oil into the market.