U.S. crude stocks climbed by 7.8-million barrels in the week ending November 2 to 432-million as refineries cut output, data from industry group the American Petroleum Institute (API) showed on Tuesday.
Brent crude, the European benchmark, was trading just above $65 a barrel while U.S. crude futures stood just below $56 - its lowest mark for 12 months.
American fingerprints are all over oil's record losing streak that's plunged prices into a bear market.
OPEC - led by Saudi Arabia - along with Russian Federation have been burned by previous decisions to refuse production cuts.
Other oil-market news: OPEC and allied oil producers will cut or adjust production as needed to balance the market, the group's president, United Arab Emirates Energy Minister Suhail Al Mazrouei, said on Wednesday.
Anxious by a drop in oil prices and rising supplies, the Organization of the Petroleum Exporting Countries is talking again of reducing production just months after increasing it.
The decline of United States crude continues as it hits its lowest price since December of past year.
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Even as the Saudis floated the possibility of a cut in production, the selling has not abated.
Crude in the USA dipped below US$55 a barrel this week for the first time in a year amid renewed fears of a glut, with domestic production at record-highs, rising OPEC output and waivers meant to ease the impact of sanctions against Iran.
Crude inventories in industrialised nations have increased for four consecutive months and are set to jump by two million barrels a day in the first half of 2019 if current output is maintained, the International Energy Agency said yesterday in its monthly report.
He urged the Federal Government to put in place measures to improve oil production, adding that OPEC will soon exempt Nigeria from crude oil cut imposed on the country and Libya since previous year.
Saudi Arabia's energy minister Khalid al-Falih said on Sunday that the kingdom will reduce exports by around 500,000 barrels a day from November to December.
Tuesday on the New York Mercantile Exchange, crude oil dropped in price 7.1% down $4.24 to $55.69 a barrel.
Merrill Lynch says US crude production will break through 12 million bpd in 2019, supporting oil exports to the rest of the world.
With widespread expectations of excessive global oil supply, the USA benchmark has found its way to the lowest price of the year so far.
Oil began to climb Monday when Saudi Arabia said that it would boost prices.