Crude sunk after a government report showed USA inventories piled up for a second week just as Russian Federation is said to be less than convinced that OPEC should extend its output limits in a meeting at the end of this month.
On the New York Mercantile Exchange crude futures for December delivery fell dropped 1.15% to $55.06 a barrel, while on London's Intercontinental Exchange, edged down 0.02% to $61.41 a barrel.
Crude oil inventories rose by 1.9 million barrels in the November 10 week to 459.0 million, higher than market expectations, according to U.S. Energy Information Administration Wednesday.
With slowing energy demand growth in China, India will account for nearly one-third of global growth by 2040, according to the latest World Energy Outlook (WEO) of the International Energy Agency (IEA).
"The oil market faces a hard challenge in the first quarter of 2018, with supply expected to exceed demand by 600,000 barrels a day followed by another, smaller, surplus of 200,000 barrels a day in the second quarter", the IEA said.
"We expect prices to remain soft and move related to any rhetoric that comes out prior to those meetings from all of the involved parties", Adam Wise, who oversees an $8 billion energy portfolio at John Hancock Financial Services Inc in Boston, said by telephone.
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The IEA also today released its latest World Energy Outlook, in which it said global oil demand will fall modestly due to the rise in electric cars.
Oil rallied above $57 a barrel to a two-year high last week on escalating tensions in the Middle East and amid signals of a potential extension of supply curbs by the Organization of Petroleum Exporting Countries and its allies. But analysts expect the price to not rise much further in coming months as the USA ramps up production.
USA government inventory data is due later on Wednesday.
USA crude oil production C-OUT-T-EIA has jumped more than 14 percent since mid-2016 to 9.65 million bpd and is expected to grow further.
The IEA said warmer temperatures could reduce consumption, while sharply rising output from some producer countries might bring back the global crude glut in the first half of 2018.
"The United States is set to become the undisputed global oil and gas leader; renewable are being deployed rapidly thanks to falling costs; the share of electricity in the energy mix is growing; and China's new economic strategy takes it on a cleaner growth mode, with implications for global energy markets", said the report.