The steady decline of oil prices has accelerated after a sharp increase in US oil supplies to drive the market to its lowest level since Opec vowed to extend its programme of supply cuts.

The price of Brent crude plummeted almost 3.5pc to $48.38 per barrel after official US data showed an increase in the country’s crude inventories of 3.3m barrels in a shock to market traders who had expected a drop of 3.1m barrels.

David Madden, of CMC Markets, said: "The oil market has been in decline since the Opec announcement last month, and now that US stockpiles are rising, we may see a continuation of the decline."

The market offered a muted response as the world’s largest producers agreed last month to extend the six month supply cut deal by nine months. By contrast the initial deal between Opec and non-Opec oil producers lifted prices by a quarter last November.