Brent North Sea crude for delivery in December dropped $1.02 to $112.98 a barrel in London late afternoon deals.

New York's West Texas Intermediate (WTI), or light sweet crude for November delivery, sank 22 cents to $91.87 a barrel.

The US government's Department of Energy announced that American oil stockpiles rallied by 2.86 million barrels in the week ending October 12.

That was far higher than market expectations for a gain of 1.3 million barrels, according to analysts polled by Dow Jones Newswires.

The report also came in above expectations for gasoline, reporting a build of 1.72 million barrels, compared with a projected 300,000-barrel build.

Rising stockpiles normally weigh on prices because they are regarded as an key indicator of weakening demand for energy.