Oil fell sharply on Wednesday after US government data showed a rise in crude oil and gasoline stocks last week.

Prices had already dropped steeply in the previous session on expectations that a faltering economy in top energy consumer the United States would hit demand growth.

US crude was $5.45 down at $133.29 a barrel by 1452 GMT. London Brent crude was $4.85 down at $133.90 a barrel.

US crude oil stocks rose 3 million barrels last week, when analysts had predicted a fall of 2.1 million barrels. Gasoline stocks rose 2.4 million barrels versus a forecast for a 400,000 barrel draw. Distillates rose 3.2 million barrels, when analysts had predicted a rise of 2 million.

"Crude inventories are low right now so we're going to need to see some more building from crude for the market to get comfortable with the inventory level...$130 is going to be a key level," said Amanda Kurzendoerfer, analyst at Summit Energy.

Investors have pumped cash into oil and other commodities this year looking to hedge against inflation and the weak dollar, which has helped drive crude oil up about 50 percent from the start of this year to a record above $147 a barrel earlier in July. - Reuters