Oil drops 3%, hits fresh 3-week lows

Oil futures fell sharply on Thursday extending previous session losses amid global supply glut concerns and diminishing hopes over a potential deal to freeze output.

West Texas Intermediate for October lost about 3% to hit a low of $43.33 a barrel on Nymex, level last seen August 11.

On Wednesday, EIA reported crude oil inventories increased by nearly 2.3 million barrels during last week, well above the 0.921 million barrels expected, fueling concerns of an oversupplied market.

Also weighing on prices was data showing a contraction in the US manufacturing activity, which contributed to expectations of weaker energy demand.