New York (AFP) – World oil prices fell sharply Thursday as the market appeared to do a double-take on the US oil inventories report showing US crude stockpiles hit a fresh record.

The US benchmark, West Texas Intermediate for April, dived $ 2.82 to close at $ 48.17 a barrel on the New York Mercantile Exchange, more than wiping out the prior day’s rebound.

European benchmark Brent North Sea crude for April delivery sank $ 1.58 to $ 60.05 a barrel in London.

Both futures contracts had surged Wednesday after the US Department of Energy reported that US crude inventories had increased by a much-bigger-than-expected 8.4 million barrels in the week ending February 20, to a record 434.1 million barrels.

For analysts, the market rally was due to traders focusing on the DoE report’s positive elements for demand: falling gasoline and distillates stockpiles.

But Thursday the market was back to weighing the basic fundamentals of global oversupply, made worse by high US production and weak demand in a slowing world economy.

“I think a lot of it is just a delayed reaction to yesterday’s (DoE) reports. We had a nice rally, but I don’t think yesterday’s numbers were bullish at all,” said IAF Advisors analyst Kyle Cooper.

Crude oil has lost about 50 percent of its value since June.

“The global petroleum market may be in the process of rebalancing as low prices inhibit supply and encourage demand, but the market still has a clear current surplus, with much of the excess flowing into US inventories,” said Tim Evans of Citi Futures.