Oil fell about 2 per cent overnight in heavy trade, extending the previous session's slump to prices not seen since an OPEC-led pact to cut production was agreed, as record US crude inventories fed doubts about the effectiveness of the deal to curb a global glut.

US crude prices fell through the $US50 a barrel support level, with market participants unwinding some of the massive number of bullish wagers they had amassed after the deal.

The losses followed Wednesday's slide of more than 5 per cent, the steepest in a year, after data showed crude stocks in the United States, the world's top oil consumer, swelled by 8.2 million barrels last week to a record 528.4 million barrels.

But several analysts remained bullish on oil for the long term.

"Headline risk can capture the imagination of the market over the near term, but we see dips as short-lived, key buying opportunities," RBC analysts said in a note.

"Record high inventory levels are reason for pause, but we believe that the market is overly focused on US stocks ... The US will be the last of the major regions to rebalance stocks given that storage capacity remains abundant, cheap and US shale is extremely elastic in a $50-per-barrel price environment."

Brent crude settled 92 cents, or 1.7 per cent, lower at $US52.19 a barrel. On Wednesday, the benchmark slumped 5 per cent, its biggest daily percentage fall in a year. US West Texas Intermediate crude (WTI) extended Wednesday's 5.4 per cent losses by 2 per cent, or $US1, to end at $US49.28 a barrel, the first time below the $50-mark since mid December.

Trading volumes soared with a record high of more than 487,000 lots changing hands in front-month Brent crude, according to Reuters data that extends back to 1988. Over 1 million contracts in front-month WTI traded, the highest since the OPEC cuts were announced on Nov. 30.

Brent and WTI hit respective session lows of $US51.50 and $US48.59, levels not seen since the OPEC cuts.

Both benchmarks, however, were still within a tight range of about $US3-$US5 that they have been trading in since the Organisation of the Petroleum Exporting Countries agreed with other major producers, including Russia, to curb output during the first half of the year in a bid to lift prices after a two-year rout.

"I still think we will stick in a fairly narrow range with the current levels reflecting the average price for the remainder of the year and a bottom of around $US40 and a top end of somewhere around $US60," said Chris Gaffney, president of EverBank World Markets.