[LONDON] Oil prices fell on Wednesday, with US crude for September hitting a contract low, as US government data showed oil inventories unexpectedly rose last week and equity markets suffered from disappointing trading results.
US crude oil stocks rose by 2.5 million barrels, Energy Information Administration data showed, compared with an expected 2.3-million-barrel drawdown.
With crude stocks remaining well above their five-year seasonal average, US crude for delivery in September slipped US$1.19 to a contract low of US$49.67 a barrel. It was trading at US$50, down 86 cents, at 1450 GMT.
"The crude oil inventory rise was driven by a strong rebound in crude oil imports, which neared 8 million barrels per day,"said John Kilduff, partner at Again Capital LLC in New York.
Brent crude was trading 64 cents lower at US$56.40 a barrel.
Disappointing financial results from technology giant Apple resulted in weak early trading in the US stock market, weighing down crude prices that were already edging lower after early signs US crude stocks had risen.
A global oil glut and subsequent price drop have thus far left Opec members cold.
Delegates from members of the Organization of the Petroleum Exporting Countries (Opec) indicated this week they expected the price drop to be short-lived and that they would not defer from a strategy of keeping output high to maintain market share.
Pressure has been rising on Opec states to adjust production in the face of a rise in Iranian exports once Western sanctions are loosened. A sharp fall in the Chinese stock market and fallout from the Greek debt crisis have also added to concerns about demand being strong enough to absorb high supply.
The global supply glut is also taking its toll on the products market. China's exports of diesel in August are expected to reach their highest since at least 1999 as the domestic market cannot absorb high output from refineries, sources said.
Opec kingpin Saudi Arabia has also been stepping up exports of diesel.