West Texas Intermediate for December delivery fell 37 cents to settle at US$55.33 a barrel on the New York Mercantile Exchange, the lowest close since Nov 2.
Just last week, prices for both crude benchmarks hit their highest levels since 2015.
American crude stockpiles climbed by 1.85 million barrels last week to 459 million barrels, and production extended gains to an all-time high 9.65 million barrels a day, the Energy Information Administration said yesterday.
The Paris-based IEA cut its oil demand growth forecast by 100,000 barrels per day (bpd) for this year and next, to an estimated 1.5 million bpd in 2017 and 1.3 million bpd in 2018.
"Using a scenario whereby current levels of Opec [Organisation of the Petroleum Exporting Countries] production are maintained, the oil market faces a hard challenge in 1Q18 with supply expected to exceed demand by 0.6m bpd followed by another, smaller, surplus of 0.2m bpd in 2Q18".More news: Bills benching QB Taylor for Peterman
That will keep prices down and help make the United States a net exporter of oil - in addition to gas - by the late 2020s.
In 2025, global oil demand is expected to increase by 7 percent and reach 100.3 million barrels per day, which is 2.1 barrels more than forecast past year. But analysts expect the price to not rise much further in coming months as the US ramps up production.
Global oil demand growth is likely to have slowed to 1.3 million bpd in the third quarter of this year, in part because of the impact of hurricanes Harvey and Irma in August and September on US consumption.More news: Hijab-wearing Barbie doll introduced in honor of Olympic fencer Ibtihaj Muhammad
According to the IEA, China will overtake the U.S. as the largest oil consumer around 2030, and its net imports will reach 13 million barrels per day in 2040.
In addition, analysts said oil prices were pressured by a global commodities selloff, led by base metals like nickel and copper, due to weaker-than-expected economic data from China.
Crude exports rose by 260,000 barrels a day, while inventories at the key Cushing, Oklahoma, pipeline hub fell by 1.5 million barrels, the largest draw since July. Energy demand will continue to grow, but India will now take the lead, as growth in China slows down.More news: Russia Used Video Game Screenshots to "Prove" the US Is Assisting ISIS
Meanwhile, the the Organization of Petroleum Exporting Countries has yet to show it has convinced Russian Federation, one of its partners in the deal, that a decision to prolong output cuts is needed when the group meets in Vienna this month.
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