Oil prices dropped to their lowest level in almost six weeks on Wednesday after government data showed an unexpected increase in U.S. inventories of crude, reigniting worries about oversupply.

Light, sweet crude for September delivery ended down $1.10, or 1.6%, at $67.66 a barrel on the New York Mercantile Exchange, its lowest close since June 21. U.S. oil prices are now 8.8% below their June multiyear high. Brent crude, the global benchmark, shed $1.82, or 2.5%, to $72.39 a barrel.

Prices...