Analysts expected a drop of about 0.457 million barrels for this week.
The API reported a decline of 3.479 million barrels in the previous week.
Oil prices continued its downward trajectory on Tuesday, pressured by mounting concerns over the demand side.
The West Texas Intermediate for June delivery lost 3.33 U.S. dollars, or 3.2 percent, to settle at 99.76 dollars a barrel on the New York Mercantile Exchange. Brent crude for July delivery decreased 3.48 dollars, or 3.3 percent, to close at 102.46 dollars a barrel on the London ICE Futures Exchange.
Also weighing on the market was a strong U.S. dollar. The dollar index, which measures the greenback against six major peers, rose 0.26 percent to 103.92 in late trading on Tuesday, hovering near a two-decade high.
A stronger dollar is a negative for commodities priced in the unit, making them more expensive for buyers using other currencies.
Traders are also awaiting data on U.S. crude stockpiles as the U.S. Energy Information Administration is set to release its weekly petroleum status report on Wednesday.
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