The API reported a drop of 3.089 million barrels in the previous week.
Analysts are forecasting a decrease of about 2.6 million barrels for the current week.
Oil prices declined on Tuesday after the International Energy Agency (IEA) said the COVID-19 Omicron variant would dampen global demand recovery.
The West Texas Intermediate (WTI) for January delivery lost 56 cents, or 0.8 percent, to settle at 70.73 U.S. dollars a barrel on the New York Mercantile Exchange. Brent crude for February delivery decreased 69 cents, or 0.9 percent, to close at 73.70 dollars a barrel on the London ICE Futures Exchange.
"A surge in new Covid cases is expected to slow the recovery in global oil demand, with air travel and jet fuel most affected," the IEA said Tuesday in its closely-watched monthly report.
The Paris-based energy watchdog trimmed its demand forecast by around 100,000 barrels a day for both 2021 and 2022, as compared with its previous projections.
"The steady rise in supply combined with easing demand has considerably loosened our balances for 1Q22 compared to last month's report," said the IEA.