SINGAPORE (March 22): Oil prices dipped on Wednesday as rising crude stocks in the United States underscored an ongoing global fuel supply overhang despite an OPEC-led effort to cut output.

At 0803 GMT, prices for front-month Brent crude futures, the international benchmark for oil, were at US$50.66 per barrel, down 30 US cents or 0.59% from their last close.

US West Texas Intermediate (WTI) crude futures were down 28 US cents, or 0.6%, at US$47.96 a barrel.

"Crude oil prices fell as concerns over rising US inventories resurfaced," ANZ bank said on Wednesday.

US crude oil inventories climbed by 4.5 million barrels in the week ended March 17 to 533.6 million barrels, the American Petroleum Institute (API) said late on Tuesday.

"The American Petroleum Institutes' crude inventories stuck the knife into crude overnight, coming in at a 4.5 million barrel increase against an expected increase of 2.8 million barrels," said Jeffrey Halley, senior market analyst at futures brokerage OANDA in Singapore.

"If the API stuck the knife in, tonight's EIA Crude Inventory figures may twist it. A blowout above the 2.1 million barrel increase expected, may well torpedo oil below the waterline," he added.

Official US Energy Information Administration (EIA) oil storage data is due on Wednesday.

The bloated storage comes as US oil production has risen over 8% since mid-2016 to more than 9.1 million barrels per day (bpd), levels comparable to late 2014, when the oil market slump started.

Rising production in the United States and elsewhere, and bloated inventories, are undermining efforts led by the Organization of the Petroleum Exporting Countries (OPEC) to cut output and prop up prices.

"OPEC's market intervention has not yet resulted in significant visible inventory draw-downs, and the financial markets have lost patience," US bank Jefferies said on Wednesday in a note to clients, although it added that the cutbacks would likely start to show by the second half of the year if OPEC extends its production cuts beyond June.

Despite cuts, analysts warned of renewed or ongoing oversupply in coming years, especially as US shale producers ramp up and once OPEC returns to full capacity.

"On an annual average basis, we expect US crude oil production to grow by 360,000 barrels per day in 2017 and 1 million bpd in 2018," Jefferies said.

US bank Goldman Sachs warned its clients in a note this week that a US shale led production surge "could create a material oversupply in 2018-19."