Oil prices plummeted by at least 3% after the Energy Information Administration suggested supply outstripped demand as it reported 3.3 million barrels of oil in commercial stockpiles for the week to 2 June.
Experts said the oil market would remain well supplied for the foreseeable future, even if industry costs rise.
Brent crude oil slumped by 3.4% to $48.42, while West Texas Intermediate crude oil fell by over 4% to $46.19 per barrel.
Oil giants BP (BP.) and Shell (RDSB) were hit by the decline in prices, with BP down 1.7% to 456.8p and Shell ticking 1% lower to £21.15.
Thanks to the stocks dominant weighting, the FTSE 100 was pulled 0.6% lower to 7,478.
On Wednesday, the S&P 500 nudged 0.2% higher to 2,433 as investors were cautious ahead of former FBI director James Comey's testimony.
Comey was investigating whether links between the Trump administration and Russia before he was fired by the President last month.
FTSE 100 RISERS AND FALLERS
Investors were not impressed by AstraZeneca's (AZN) decision to seal a deal with Grunenthal for global rights to migraine drug Zomig outside of Japan for $200m. Shares in the pharma giant retreated 1% to £53.02.
FTSE 250 RISERS AND FALLERS
Among the mid-caps, plastic products designer RPC (RPC) failed to impress the market despite a 77% increase in operating profit. Shares in the company fell 6.7% to 892.9p.
A 40% hike in the dividend by real estate investment trust Workspace (WKP) won over the market who dismissed lower pre-tax profit due to a smaller uplift in property valuation. The stock gained 4.3% to 876.5p on the results.
Details of a share buyback programme pushed BGEO (BGEO) 2.3% higher to £36.56. The company used to be called Bank of Georgia.
SMALL CAP RISERS AND FALLERS
Beef and chicken retailer Zambeef (ZAM) continued to struggle this year as a challenging economy in Zambia and sharp drop in commodity prices hit performance. The company said its first half pre-tax profit plummeted from $6.8m a year ago to $590,000. Investors ran for the exit as the stock crashed by 24.3% to 14p.
Mineral & Financial Investments (MAFL) announced TH Crestgate, which the company has a 49% holding in, increased its stake in the Lagoa Salgada project in Portugal to 100%. The market approved of the move as the stock soared by 30% to 18.7p.
Cheap shoe flogger Shoe Zone (SHOE) reported a statutory pre-tax profit of £0.3m in its first half, down from £1.9m thanks to a weaker sterling against the dollar. The stock fell 4.3% to 179.5p.
Less people drinking Blavod vodka in Eastern European sparked concern for alcohol seller Distil (DIS). Investors overlooked a maiden full year profit of £10,000, up from a loss of £98,000 as the stock fell 7.3% to 3.2p.