Crude futures slumped in American trade as the dollar index rebounded from a seven-month low, while earlier data from the US, the world's largest energy consumer, showed the first inventory buildup in nine weeks.
As of 04:55 GMT, US crude futures due on July 15 plunged 4.17% to $46.18 a barrel from the opening of $48.19, while Brent crude futures due on August 16 tumbled 3.41% to $48.41 a barrel from the opening of $50.12, as the dollar index gained 0.11% to 96.74 from the opening of 96.59.
The Energy Information Administration released its report on US crude stocks, showing a buildup of 3.3 million barrels in the week ending June 2, compared to a 6.4M drawdown in the previous reading, while analysts expected a 3.1M rise.
Total stocks rose to 513.2 million barrels in the US, remaining within the uppermost range in the medium term in this time of the year, and near eighty-year highs.
Similarly, gasoline stocks rose 3.3 million barrels, while distillate inventories, including heating fuel, rose 4.4 million barrels, both also remaining above medium-term averages in this time of the year.
Oil prices tumbled back below $50 after hiatus yesterday, as markets price in a surge in Libyan production to the highest since October, 2014 at 827 thousand bpd, while the US oil rig count rose to 733, the highest since April, 2015.
As US production increases to 9.34 million bpd and global crude inventories remain above five-year averages, OPEC energy minister opted to extend the output cuts of 1.8 million bpd in cooperation with Russia and other independent producers until March.
However, markets weren't impressed by OPEC's efforts as investors predict a drop in prices in 2018 and 2019 if US production continued its recent leaps, which could override OPEC's supply cuts by half a million bpd.