Oil prices have declined following an unexpected increase in US crude stocks last week and Libya's initiative to improve output over the next few months.

Brent futures for February delivery slipped four cents to $54.42 a barrel, while the US West Texas Intermediate crude fell five cents to $52.44 a barrel, Reuters reported.

The US Energy Information Administration said that last week, crude inventories in the US unexpectedly increased by 2.3 million barrels compared with an expected fall of 2.5 million.

"Oil prices have declined following an unexpected increase in US crude stocks last week and Libya's initiative to improve output over the next few months."

Reuters quoted CMC Markets Sydney chief market analyst Ric Spooner saying: "There was disappointment with the size of the US crude inventory build. Traders may have thought prices have run high enough."

Libya's National Oil (NOC) confirmed the reopening of pipelines leading from the Sharara and El Feel fields and hopes to add 270,000bpd to national production.