Crude oil prices plummeted to a near 10-week low on Wednesday, after official data showed an unexpected jump in U.S. crude stockpiles last week.
Traders were also worried that escalation in the trade conflict between the U.S. and China could lead to a significant slowdown in oil demand growth next year.
Crude oil futures for September delivery ended down $2.03, or 3%, at $65.01 a barrel, after declining to a low of $64.51 in the session.
On Tuesday, crude oil futures ended down $0.16, at $67.04 barrel, after having advanced to $68.36 a barrel earlier.
According to data released by the U.S. Energy Information Administration, crude oil inventories rose by 6.8 million barrels in the week ended August 10, as against expectations for a drop of about 2.4 million barrels. Following the jump, total U.S. crude oil inventories stood at 414.2 million barrels as of last week.
Gasoline inventories fell by 740,000 barrels last week, compared to expectations for a drop of 583,000 barrels. Distillate inventories including diesel were up by 3.5 million barrels last week.
After market hours on Tuesday, the American Petroleum Institute reported a 3.7 million barrels jump in crude inventories last week. The report also said that crude stocks at the Cushing, Oklahoma, delivery hub rose by 1.6-million barrels.
As the second phase of U.S. sanctions on Iran is set to come into force in November, the OPEC decided in June to increase crude production.
Despite Saudi Arabia reducing its production in July, global oil production in the month rose by 680,000 bpd, with total production of OPEC countries rising by 41,000 bpd to 32.32 million bpd.
The OPEC recently pegged world oil demand at 1.43 million bpd in 2019, down from 1.64 million bpd in 2018.