Investor focus on growing U.S. stockpiles is responsible for the drop.
With Brent on Thursday settling at $45.52 per barrel and West Texas Intermediate closing at $43.16, crude dropped about 9 percent week-to-date: the biggest decline since mid-January.
The losses were reportedly the result of investors finally overlooking Organization of Petroleum Exporting Countries (OPEC) members teasing that they might freeze production during their upcoming meeting in September and instead focusing on the problem of U.S. stockpiles.
This shift in focus drew attention to U.S. Energy Information Administration data showing a 2.3 million barrel build in crude stocks in the last week - more than double what the market had expected.
Gene McGillian, senior analyst, Tradition Energy
We're not going to be comfortable pushing prices above $50 with only North America reducing output while the rest of the world is running all out
Inventories of distillates, including diesel and heating oil, rose nearly 10 times as much as forecast.
Gene McGillian, a senior analyst and broker at Tradition Energy, said, "Inventories are rising and excess supply will grow.
"We're not going to be comfortable pushing prices above $50 with only North America reducing output while the rest of the world is running all out."
Exacerbating Thursday's results was Genscape reporting a 714,282 barrel drawdown at the Cushing, Oklahoma, delivery point for U.S. crude futures during the week ended on August 30.
Moreover, WTI is edging toward a test of its August 11 low of $41.10, a key support for U.S. crude futures, and something that prompted Andreas Wunder of Alphatrade Asset Management, to remark, "Basically it's a retest of that breakout," adding that the move lower is as forceful as WTI's rally above $48 that occurred a week later.
Meanwhile, a Reuters poll of 34 analysts forecasts Brent at a 2016 average of $45.44 per barrel compared to last month's prediction of $45.51: the first downward revision in six months.
But despite Thursday's bad news, Craig McMahon, head of research-Asia Pacific for Wood Mackenzie, regards it as a temporary blip on the road to real recovery.
He told CNBC, "Q4 is the real big drawdown quarter, so we think the fundamentals are still moving to a more balanced market, that we'll see prices increase shortly ... and inventory levels will start to fall," with impetus to a full recovery taking off in the new year.
As for speculation over what will happen at the OPEC summit in Algeria, Harry Tchilinguirian, global head of commodity markets strategy at BNP Paribas, told Reuters, "Talk is cheap; reality will set in, and the market will realize that the agendas of various OPEC producers are not aligned."
John Kilduff, founding partner of Again Capital, has repeatedly warned that no true market rebalance will occur until Asian demand recovers and oversupply issues are effectively dealt with.