Crude oil settled below 54 U.S. dollars a barrel on Wednesday as a big-than-expected increase in U. S. crude inventory reinforced concerns over falling demand.

Light, sweet crude for December delivery fell 77 cents to settle at 53.62 dollars a barrel on the New York Mercantile Exchange.

Crude futures initially rose above 55 dollars a barrel in the early morning session as the dollar weakened against other major currencies.

But inventory report from the U.S. Energy Department released on Wednesday morning changed the sentiment of the market and brought the price down to 22-month low of below 54 dollars a barrel. The report posted a 1.6 million barrels jump in the crude supplies during the week ended on November 14, which is much more than the 1.2 million barrels increase investors had predicted. Meanwhile, gasoline stockpiles had risen by 500,000 barrels during the same period, according to the report.

Concerns about slumping demand for fuel products have driven oil prices down over 63 percent from a record high of 147.27 dollars a barrel reached in mid-July.

In London, Brent crude for January delivery rose 39 cents to 52. 23 dollars a barrel on the ICE Futures Exchange.