Oil prices have edged down as more-than-expected-output and high volumes of unsold crude across the globe weighed on markets.

Brent crude futures were down 33 cents and traded at $42.77 a barrel, while the US West Texas Intermediate (WTI) crude futures slipped 14 cents and traded at $40.69 per barrel, Reuters reported.

Data released by the US Energy Information Administration (EIA) highlighted a fall in petrol stocks by 3.26 million barrels to 238.2 million barrels last week.

However, crude inventories increased by 1.4 million barrels against analysts' expectations for a decrease.

"Maybe the surprise drawdown in gasoline inventories helped future prices remain stable but that does not change the fact: the US is flooded with oil."

EIA also said that movements of crude oil by rail within the US averaged at 443,000 barrels per day in the first five months of this year, approximately 45% down from the same period last year.

PVM Oil Associates lead oil analyst Tamas Varga told the news agency: "Maybe the surprise drawdown in gasoline inventories helped future prices remain stable but that does not change the fact: the US is flooded with oil."

Oil marketer Somo said that crude oil production in Iraq last month increased to the highest level since January last month to 4.632 million barrels per day.

The dollar value declined and has lost 2% since late last month against a basket of other currencies, making fuel purchases cheaper for countries with other currencies.