Oil fell toward $48 a barrel on Wednesday, after a bigger-than-expected rise in U.S. crude oil stocks last week.
Prices had already come under pressure when the International Monetary Fund cut its 2009 global growth forecast and said the world was in a severe recession.
U.S. crude for June delivery stood 56 cents lower at $47.99 a barrel at 1447 GMT, off a session low of $47.70 and a session high of $49.09.
London Brent crude fell 79 cents to $49.03 a barrel.
The U.S. Energy Information Administration data showed a 3.9 million barrel rise in crude oil stocks last week, more than the 2.6 million barrel rise forecast by analysts.
Gasoline and distillate stocks also rose unexpectedly.
"It's pretty ugly," said Tom Bentz, senior commodity analyst, of BNP Paribas Commodity Futures. "Inventories keep building and we have too much of everything."
Demand is weak because of the world economic recession.
The IMF predicted in its latest World Economic Outlook that the global economy will shrink by 1.3 percent in 2009. In January, the organization had forecast global growth of 0.5 percent this year.
Oil prices had drawn some support earlier in the day from expectations of a recovery in economic growth in China, the world's second-biggest energy consumer.
China's central bank has predicted a recovery in economic growth this year, despite the country's gross domestic product slowing in the first quarter to 6.1 percent from a year earlier, the lowest rate on record.
Goldman Sachs has raised its forecast for China GDP growth this year to 8.3 percent from 6.0 percent.
HIGH STOCKS
Despite optimism about China, oil demand is falling, illustrated by the latest import data from Japan and South Korea.
"Arguably the biggest uncertainty in the oil market at the moment is the economy," Lawrence Eagles, oil analyst at JP Morgan said in a research note.
