Analysts said rising US stockpile combined with downbeat global demand outlook renewed investors' concern about lingering global glut.
The Paris-based IEA argued that with consumption in petrochemicals and other transportation still growing, the drop in oil demand would be at a modest pace.
"The oil market faces a hard challenge in 1Q18 with supply expected to exceed demand by 600,000 bpd followed by another, smaller, surplus of 200,000 bpd in 2018".
In a report released two days ago, the International Energy Agency (IEA) had projected that the United States will be the world's leading producer of oil and gas by 2025.
"The oil market should be able to find a longer-term equilibrium, with the oil price in a range of $50-70 a barrel", the agency said.
Oil prices declined on Wednesday after report showed an increase in US crude stockpile.
Opec said in the latest edition of the World Oil Outlook forecasts that oil would supply just over 27 per cent of worldwide energy needs in 2040, while natural gas will see its share at slightly more than 25 per cent.
Global oil markets are looking ahead to a meeting of the Organization of the Petroleum Exporting Countries in Vienna on November 30 which is expected to decide to extend limits on crude production to help tighten supply.
Oil ministers have signalled that they are likely to extend the agreement, possibly until the end of next year.
Oil prices have risen steadily over the past few months as the impact of supply cuts has drained inventories.
The low extended to $55.18.
While the crude build of 1.9 million barrels reported by the Energy Information Administration was more than forecast, it was not as big as the increase of 6.5 million barrels reported on Tuesday by industry group the American Petroleum Institute.
The recent gains recorded by global oil prices have slipped as the commodity has lost more than $2 in seven days. U.S. light crude fell 7 USA cents to US$55.26.