The American Petroleum Institute (API) has reported an increase of 10.507 million barrels of crude oil in U.S. inventories for the week ending Friday.
Analysts expected a hike of 0.321 million barrels for this week.
The API reported a drop of 2.184 million barrels in the previous week.
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Oil prices fell on Tuesday after the United States said it would release more crude from its Strategic Petroleum Reserve, Xinhua reported.
The West Texas Intermediate for March delivery dropped 1.08 U.S. dollars, or 1.35 per cent, to settle at 79.06 dollars a barrel on the New York Mercantile Exchange. Brent crude for April delivery lost 1.03 dollars, or 1.19 per cent, to close at 85.58 dollars a barrel on the London ICE Futures Exchange.
The U.S. Department of Energy said Monday that it would sell 26 million barrels of crude oil from the reserve, a release Congress had mandated in previous years.
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The deliveries of the oil will take place from April 1 through June 30, the department said in a statement.
Traders awaited data on U.S. fuel stockpiles as the Energy Information Administration will release its weekly petroleum status report on Wednesday.
Analysts polled by S&P Global Commodity Insights expect the report to show a rise of 600,000 barrels in U.S. crude supplies.
