Oil prices fell Thursday after the US government reported crude inventories increased again to record highs, adding to concerns about the global supply glut.

US benchmark West Texas Intermediate (WTI) for delivery in March dropped 98 cents to close at $ 51.16 a barrel, after shedding nearly $ 1.40 on Wednesday.

In London, Brent North Sea crude for April delivery settled at $ 60.21 a barrel, down 32 cents from the prior trading session.

WTI futures dropped sharply in early trade, sinking below $ 50, but erased much of the losses after the Department of Energy reported US crude inventories increased by nearly eight million barrels in the week through February 13.

“We obviously saw this coming as we had a large (price) decline yesterday, so a part of it was already priced in and the market is now trying to find a fair value,” said Carl Larry of Frost & Sullivan.

Even though crude inventories were at their highest level on record, and the increase was larger than analysts expected, the gain was only half that of the number announced Wednesday by the American Petroleum Institute in its weekly report.

The DoE report was delayed a day to Thursday because of Monday’s public holiday.

Crude prices have lost about 50 percent since June owing to an oversupply in world markets, a weak global economy and a strong dollar.

And while prices have risen from their lows in recent weeks on news that the number of US oil rigs in operation has fallen and energy giants are cutting back on investment, market-watchers say volatility is likely to continue for some time.

“An interesting thing is the US production is at a record high on a week-to-week basis, despite the fact we’ve laid down a lot of rigs and cut a lot of expenses,” Larry said.