Oil prices have plunged following a surprise increase in US crude stocks that revived worries about the supply glut.

Global benchmark Brent crude slipped 1% at $49.44 a barrel, while the US West Texas Intermediate (WTI) crude edged down 1.7% at $47.30 a barrel, Reuters reported.

Data released by the American Petroleum Institute (API) highlighted a rise in US crude stocks by 4.5 million barrels in the week ending 19 August.

"There is currently a race to print any freeze headlines but we have not yet seen strong substance behind them."

The increase is against analysts’ expectations of a 455,000-barrel fall.

Investors are also watching for the data to be published by the US Government on weekly crude stocks.

PetroMatrix managing director Olivier Jakob told the news agency: "There is currently a race to print any freeze headlines but we have not yet seen strong substance behind them."

Iraq Prime Minister Haider al-Abadi said that the country has yet to gain its full oil market share, and the government will not reduce crude output as part of any agreement by the Organization of the Petroleum Exporting Countries (OPEC) members.