Investing.com - Oil prices were weighed down on Thursday after data showing that U.S. output rose to a record, leading to a surge in inventory levels only matched once in the last two years.
U.S. crude prices were down 1.4% to trade at $62.7 by 08:04 AM ET (12:04 GMT), off 87 cents from their previous settlement.
London traded Brent crude futures shed 1.3% to $71.22, down 96 cents from their last close.
Crude stockpiles rose by 9.9 million barrels last week, hitting the highest level since Sept. 2017, the U.S. Energy Information Administration said in its weekly report on Wednesday. The increase came as production hit a record high of 12.3 million barrels per day.
"It was quite a surprise to have a nine times bigger build in crude than expected, along with a build in gasoline where a draw was expected," said Tariq Zahir, managing member at the oil-focused New York fund Tyche Capital Advisors. "These numbers should continue to put pressure on crude prices in the short term."
John Kilduff, founding partner at New York energy hedge fund Again Capital, agreed.
"The small rise in gasoline inventories was also a bearish factor, as the increase came in the face of continued strong, summer-like demand and a slight decline in refinery utilization rates," Kilduff said.
Oil prices continued to be underpinned by the political crisis in Venezuela, tighter U.S. sanctions against Iran that allow no more exemptions from May and as the Organization of the Petroleum Exporting Countries continued with supply cuts.
Oman's energy minister Mohammed bin Hamad al-Rumhy said on Wednesday it was OPEC's goal to extend the production cuts, which started in January, when the group and its allies next meet in June.
Despite the desire of many OPEC members to continue supply cuts, the group may eventually be forced into action to meet demand in a market that has seen prices rise more than 30% this year.
--Reuters contributed to this report