Oil prices have dropped below $45 a barrel as worries about oversupply outweigh hopes of producer action to increase prices.

Brent crude for October declined 35 cents at $45.04 a barrel, while the US crude for September was down 24 cents at $42.78, Reuters reported.

Market intelligence firm Genscape released a report, which highlighted an increase of over 307,000 barrels at the Cushing, Oklahoma delivery hub for US crude.

"Most OPEC members, as well as non-OPEC members such as Russia are expected to participate in an International Energy Forum meeting to be held in Algeria."

Since June this year, some members of the Organization of the Petroleum Exporting Countries (OPEC) have been saying that fresh talks about a freeze in oil production may take place in September.

These talks are expected to lead to action to reduce supplies.

Most OPEC members, as well as non-OPEC members such as Russia are expected to participate in an International Energy Forum meeting to be held in Algeria.

Russia said that it does not expect any new discussions with OPEC yet.

It is reported that Iran refused to join an initiative discussed earlier this year to cut production and has not yet confirmed whether it would cooperate with any new proposal.

Traders are watching for the report to be released by the American Petroleum Institute on inventory update.