Brent crude dropped below $54 a barrel in choppy trade on Tuesday. On the other side, the Atlantic dropped for a sixth session to only above a six-year low.

Recent reports suggested that the US rig count fell to 1,125 last week from 1,809 rigs a year ago. From the Past cycles it has been found that there is frequently a lag between when drilling stops and when oil supply stops growing. Brent was trading at $53.59, down 35 cents, by 0807 GMT.

The April contract that ended in earlier session closed down $1.23 after hitting $52.50 earlier on Monday. US crude was at $43.41 a barrel and it is down 47 cents. Jonathan Barratt, chief investment officer at Sydney's Ayers Alliance said that traders are going to be quite happy to see the spread go out to $15-20.

"We expect WTI to remain under pressure as inventories swell further as the seasonal maintenance period begins. We expect this to remain the case in the short term", ANZ bank said.

Ian Taylor, chief executive of oil trader Vitol said that there is a possibility that prices of oil might increase slightly because the oil markets balance by the second half of the year. Presently, traders are waiting for data on US crude inventories for price direction.

A Reuters poll showed likely build in stocks for a tenth week to a new record high. Presently, the oil market is oversupplied and it is driven in part by the success of North American shale, said Morgan Stanley.