Oil prices dropped on Wednesday to extend falls from the previous day, as a massive increase in U.S. fuel inventories and a slump in Chinese demand implied that global crude markets remain oversupplied despite OPEC-led efforts to cut output. 

International Brent crude futures were trading at 54.54 per barrel at 0214 GMT, down 51 cents, or 0.9 %, from their previous close.U.S. West Texas Intermediate (WTI) crude was at $51.52 a barrel, down 65 cents, or 1.3 %.

These slumps came after over 1-% falls the previous day. The sharp declines came on the back of unexpectedly big increases in U.S. fuel inventories, as reported by the American Petroleum Institute (API) on Tuesday.