Oil futures settled nearly 7 percent lower on Wednesday after government data showed the largest weekly increase in U.S. crude inventories since 2001 and a day after Saudi Arabia reported record production in March.



U.S. May crude closed down $3.56, or 6.6 percent, at $50.42 a barrel. The commodity has erased 2015's gains and is now down 5.4 percent on the year. Meanwhile, Brent May crude was down $3.30 at $56.90 a barrel.

U.S. crude oil inventories surged 10.95 million barrels to a record 482.39 million in the week to April 3, the Energy Information Administration (EIA) said in its weekly report.

A Reuters survey of analysts had yielded a forecast for a build of 3.4 million barrels.

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"The report is very bearish with the large crude oil inventory build and the somewhat surprising rise in gasoline inventories," said John Kilduff, partner at Again Capital LLC in New York.