Oil prices dropped three percent on Wednesday after the International Energy Agency's Oil Market Report said the growth in world demand was weakening and the US government reported an increase in crude inventories to six-year highs. US crude prices settled down 1.62 dollars at 50.45 dollars a barrel, marking the first daily loss in six trading days.

In London, Brent crude dropped 1.36 dollars to 50.07 dollars.

Prices started falling after the International Energy Agency's monthly Oil Market Report said higher fuel costs and weakening economic growth slowed demand growth in the world during the first quarter.

Meanwhile, the US federal Energy Information Administration (EIA) said that commercial oil inventories rose last week for the 11th time in 12 weeks, leaping to their highest level in more than three years.

Crude stocks rose 2.7 million barrels to 329.7 million barrels,said the EIA, the statistics branch of the U.S. Department of Energy.

Nymex gasoline futures for June settled at 1.482 dollars a gallon, down 2.83 cents, while heating oil futures for the same month settled at 1.403 dollars a gallon, down 4.65 cents. it said.