Oil benchmark Brent crude hit a three-month low on Wednesday after government data showed a rise in US crude inventories and oil production, which highlighted increasing global supply and concerns over weak demand.
Brent crude futures fell 33 cents to $71.83 a barrel by 10:55 am EDT. The contract hit a session low of $71.19 a barrel, its lowest since April 17.
US West Texas Intermediate (WTI) crude futures fell 45 cents to $67.63 a barrel.
US crude stocks surprised the market and rose by 5.8 million barrels last week as oil production hit 11 million barrels a day for the first time ever, the Energy Information Administration said on Wednesday.
"There were some supportive factors such as further declines in Cushing, Oklahoma, crude oil inventories, continued strong refinery demand and elevated gasoline demand, but the crude oil inventory rise is the standout, making for a bearish report," said John Kilduff, a partner at Again Capital Management in New York.
Oil markets have fallen over the last week as Saudi Arabia and other members of the Organisation of the Petroleum Exporting Countries (Opec) and Russia increased production and as some supply disruptions eased.
"The correction in the oil price represents something of a convergence between fundamentals and physical realities," said David Reid, lead crude market analyst at consultancy JBC Energy.
"We expect a fairly rapid lengthening in the (global oil supply) balance," Reid added.
Investors have also begun to worry about the impact on energy demand of the trade dispute between the United States and its trading partners, including China.
Trade tension between the United States and China could drag on the global economy, BMI Research said.
"The economic outlook is broadly positive, but a number of headwinds are emerging, not least a stronger dollar, rising inflationary pressures and tightening liquidity," BMI said. "Slowing trade growth will weigh on physical demand for oil."
Kansas City Federal Reserve Bank President Esther George said on Tuesday uncertainty over US trade policy could slow the economy, even if recently imposed tariffs are too small to have a big impact.
Trade policy was a "significant" downside risk to the outlook for economic growth, George said.