The price of oil fell below $57 on Tuesday for the first time in nearly four months as dealers anticipated another increase in already healthy US stockpiles of crude and refined fuels.
US crude settled down 71 cents to $56.98 a barrel, the lowest settlement since July 20. London Brent fell 68 cents to $54.05 a barrel.
Crude prices are down nearly 20 percent since hitting a peak near $71 in late August, as high costs at the pumps cooled driving demand and balmy weather curbed use of heating oil.
US crude oil inventories have built nearly 13 percent above year-ago levels, and likely rose another 1.8 million barrels last week due to strong imports, according to a Reuters survey of 13 analysts.
The US Energy Information Administration, the statistical arm of the US Department of Energy, will release its inventory data for the week to November 11 on Wednesday at 10:30 am EST (1530 GMT). "There's an awful lot of bearish momentum, but at these levels, we are getting to the stage when we should start finding a base," said Mark Keenan of MPC.
Limiting losses, Opec-member Venezuela said the cartel may need to consider reining in output at its meeting next month to offset the recovery in US production from the hurricane-beaten Gulf of Mexico.
"I think it has to be evaluated. There is an important volume from the Gulf that has still not entered the market and that could impact the market and probably Opec will have to discuss a cut in production," said Venezuela's energy minister, Rafael Ramirez.
The 11-member producer group, which has been unable to find buyers for an extra 2 million barrels per day of crude it offered after the hurricanes struck in late summer, meets on December 12 in Kuwait. Opec's acting secretary general, Adnan Shihab-Eldin, said prices are now "more realistic" and reflect a recovering balance between demand and supply.
US oil production from the Gulf of Mexico, home to a quarter of domestic supply, has recovered to more than 750,000 barrels per day, the highest level since the hurricanes knocked out the region's entire 1.5 million bpd.
US demand for heating oil is expected to be about 6.1 percent below normal this week, the third week of below-normal demand in a row due to mild weather, according to the US National Weather Service.
US demand for oil products has been running about 2 percent below a year ago, according to the most recent government statistics.
Shaky consumer confidence and higher costs should also curtail the growth in road and air travel during the US Thanksgiving holiday next week, according to travel club AAA. The holiday is typically one of the most active periods for the nation's drivers.
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