The surge in U.S. inventories, a closely watched market indicator, boosted total stockpiles to a fresh record of 528.4 million barrels, according to the Energy Information Agency.
"When combined with the huge speculative long positions in the market, it's not surprising that prices sold off so strongly," ANZ said in a note.
Crude stocks at the Cushing, Oklahoma, delivery hub for U.S. crude futures also rose 867,000 barrels, the EIA said.
On the other side of the refining equation, gasoline posted its biggest weekly inventory drawdown since April 2011, with a 6.6 million-barrel drop, owing to strong nationwide demand and reduced refining output on the U.S. east coast.
Analysts in a Reuters poll had forecast a 1.4 million-barrel drop in gasoline stocks.
U.S. crude imports rose last week by 385,000 barrels per day.
Oil prices have rallied since December on expectations that an OPEC supply cut would balance the market, but the recent pullback suggests the market is tightly wound and vulnerable to any headline shocks.
"Before this surplus is worked off, it is too early to declare victory and watch the prices rise. The oil market is global, and getting U.S. inventory under control is not enough, said Smith.
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—Reuters contributed to this report.