Oil prices have fallen today, dragged lower by persistent oversupply worries despite a bigger-than-expected drawdown in US crude inventories.

Investors were also keeping a close eye on the broad market impact of tensions between the United States and North Korea.

Brent crude, the global benchmark, was at $51.62 a barrel at 7.52am Irish time, down 28 cents, or 0.54% from its last close. That was the lowest since 1 August.

US West Texas Intermediate (WTI) crude was down 32 cents, or 0.66%, at $48.27 per barrel, reaching the lowest since 26 July.

Oil prices touched 2-1/2 month highs yesterday, but retreated to close down around 1.5%, with US prices slipping back below $50 per barrel amid ongoing oversupply concerns.

"Crude oil prices failed to hold recent gains, with a nervous market starting to doubt recent falls in inventories," ANZ bank said in a note.

"Supply-side issues also weighed on prices, with data showing Libyan production in July hit its highest level for the year."

Meanwhile, US President Donald Trump stepped up his rhetoric against North Korea again, saying his earlier threat to unleash "fire and fury" on Pyongyang if it launched an attack may not have been tough enough.

"I think the issue that is affecting the market is the general risk sentiment of sabre-rattling between Washington and Pyongyang," said Michael McCarthy, Chief Market Strategist at CMC Markets.

Official data showed crude inventories in the US, the world's top oil consumer, fell sharply by 6.5m barrels in the week ending to 4 August, as refiners ramped up run rates to the highest in 12 years due to strong demand.

But doubts remain over whether enough crude would be consumed to end a global glut after the Organization of the Petroleum Exporting Countries (OPEC) reported another increase in the oil cartel's production, even though it raised outlook for oil demand in 2018.

OPEC said its oil output rose by 173,000 barrels-per-day (bpd) in July to 32.87m bpd.

Faced with lingering global glut woes, OPEC and some non-OPEC members including Russia in May extended oil production cuts to reduce 1.8m bpd.