August crude futures dropped by almost $6.50 in a single-day’s trading to $134.5 a barrel. They recovered slightly, but then fell again the following day by more than $3 after the US’ Energy Information Administration (EIA) revealed that crude stocks had risen while demand had fallen.

According to EIA data, crude stocks increased by 3 million barrels to reach close to 297 million barrels. The market had been expecting a fall in reserves of more than 2 million barrels.

Falling demand for fuel also had an impact, as data showed that demand averaged 20 million barrels over the past month, a fall of 2 per cent on the equivalent period last year.

Oil prices have fallen more than $10 since they hit an all-time high of $147.3 a barrel on 11 July. However, anaylsts say it is too early to tell whether the recent fall marks a general correction in the crude price.