Brent crude fell below $58 a barrel today after the International Energy Agency (IEA) warned that oil prices may decline as stocks continue to increase this year.
Oil stocks held by countries in the Organisation for Economic Cooperation and Development may come close to the all-time high of 2.83 billion barrels in the middle of 2015, the IEA said.
The organisation advises the West on energy policy.
"Despite expectations of tightening balances by end-2015, downward market pressures may not have run their course just yet," the IEA said in a monthly report.
Brent crude slipped 44 cents to $57.90 today, ending a three-day rally. The benchmark gained more than 9% last week, its biggest weekly rise since February 2011.
US crude futures dropped to $52.02, down 84 cents.
Vitol chief Ian Taylor, speaking at the International Petroleum Week industry conference, said he expected a "dramatic" build in oil stocks over the next few months but that supply and demand in the oil market would move into balance in the second half of this year.
China's consumer inflation hit a five-year low for January, raising worries about oil demand in the world's second-largest economy.
Oil prices received a boost yesterday after a monthly report by the Organisation of the Petroleum Exporting Countries (OPEC) raised the forecast for 2015 demand for its oil to 29.2 million barrels per day (bpd), up 430,000 bpd from an earlier forecast.
The IEA's medium-term report released today predicted demand for OPEC oil would hold at 29.4 million bpd this year, and said US shale oil output growth would pause before regaining momentum.
US crude snapped three days of gains after a preliminary survey showed that US commercial crude stockpiles likely hit a record high last week.
