New York's main futures contract, light sweet crude for delivery in May, fell $1.27 from its closing price on Tuesday to US$48.39 (S$73.52) a barrel. In London, Brent North Sea crude for May was down 79 cents to US$48.44 per barrel on the InterContinental Exchange.

The Energy Department on Wednesday said that gasoline, or petrol, stockpiles rose 2.2 million barrels last week, compared with analyst forecasts for a drop of 1.1 million barrels.

The data comes before next month's start of the US driving season when annual demand for gasoline in the United States is traditionally at its highest as Americans hit the roads for summer vacations.

In addition, the department reported that stockpiles of US crude rose 2.8 million barrels in the week ended March 27, compared with forecasts for an increase of 2.6 million barrels.

Analysts said Wednesday's data was not supportive for prices. 'There is more supply than demand, this is typical of a recession. This is a low demand period.' Phil Flynn of Alaron Trading said there was an 'overwhelming supply' in crude that 'should keep this market anchored.

'We need to see oil go lower to work off more supply to inspire OPEC to cut back more production,' he said.

Morgan Stanley Research's Hussein Allidina said the current market 'clearly remains oversupplied despite OPEC's best efforts.'

The 12-nation OPEC cartel agreed to slash output by 4.2 million barrels per day from September last year in a bid to defend tumbling prices. Spreading worldwide recession has ravaged energy demand and slashed oil prices from their record peaks of above 147 dollars last July.

The World Bank on Tuesday forecast that the global economy was likely to shrink 1.7 percent this year, marking the first such decline since World War II. -- AFP