Oil prices have plunged this afternoon, reversing gains of more than two per cent seen earlier in the day, despite the biggest weekly drawdown in US inventories in close to a year.
Global benchmark Brent crude futures were trading 0.06 per cent down at $47.49 per barrel after reaching a high of $48.79.
West Texas Intermediate (WTI) futures were 0.53 per cent up at $45.28 per barrel after falling from $46.48.
"Crude prices are tumbling despite the biggest weekly drawdown in US inventories since September 2016," said Joshua Mahony, market analyst at IG.
Official data from the US Energy Information Administration (EIA) today said crude inventories fell by 7.6m barrels in the week to 7 July to sit at 495.4m barrels, which was more than analysts expected.
With US driving season often the root cause of significant summer drawdowns in US crude inventories, this is not necessarily unexpected. However, the sharp deterioration in crude prices is a nod to the fact that global crude output continues to outstrip demand, as highlighted by the Opec monthly report earlier today.
The price crash follows a monthly report from the Organisation of the Petroleum Exporting Countries (Opec), which showed production among its members increased in June.
Opec's report also found demand for its crude will fall next year, signalling a supply glut.
"Concerns about the market’s persistent surplus continue to frame an overall bearish environment," said Norbert Rucker, head of macro and commodity research at Swiss bank Julius Baer.
"According to the latest official data, Opec increased production by 0.3m barrels per day largely on the back of growing exports out of Nigeria and Libya, undermining its own supply restriction strategy."
Opec members have agreed to reduce output by 1.2m bpd until March 2018.