The price of oil fell below $90 a barrel after the US government said that crude supplies are now 10% higher than a year ago.
At midday, benchmark oil for April delivery was down 79 cents to $90.03 a barrel on the New York Mercantile Exchange.
It fell as low $89.55 after the government reported a big increase in the US stockpile of oil.
Brent crude, used to price many kinds of oil imported by US refineries, fell 76 cents to $110.85 a barrel on the ICE Futures exchange in London.
US oil supplies grew last week by 3.8 million barrels, or 0.4%, the Energy Department's Energy Information Administration said in its weekly report.
Analysts expected an increase of 1.1 million barrels. At 381.4 million barrels, the nation's supply of crude is 10.3% above year-ago levels.
The death of Venezuela President Hugo Chavez had little immediate effect on the price of oil.
The full impact of his death may not be felt until Venezuela, which sits on the world's second-largest oil reserves, picks a new leader - one who might choose a course different from Chavez.
Elections are expected to be called within a month.
Chavez, who died after a two-year battle with cancer, oversaw a decline in oil production during his 14 years as the leader of Venezuela.
In the short-term, traders will watch for any disruption to Venezuela's production.
Longer term, they will want to see if the new government invites foreign investment in Venezuela's oil industry and is able to boost output.
