New York, Jan 23 (IANS): Oil prices sank on Wednesday amid growing concerns over a potential oversupply of crude.

The West Texas Intermediate for March delivery settled $1.64 lower at $56.74 a barrel on the New York Mercantile Exchange. Brent crude for March delivery dropped $1.38 to close at $63.21 a barrel on the London ICE Futures Exchange, the Xinhua news agency reported.

Fatih Birol, executive director of the International Energy Agency, said he expects the market to be oversupplied by as much as 1 million barrels per day in the first half of this year, according to reports.

The comments and the successes of the US shale oil industry, which are also the main reason for the current oversupply on the oil market, weighed on the market, experts noted.

In a monthly report published on Tuesday, the US Energy Information Administration predicts further efficiency gains in shale oil drilling.

Traders also kept a close eye on disruptions to Libya's crude output.

Libya's state-owned National Oil Corporation (NOC) on Saturday declared a state of force majeure in oil ports, accusing the east-based army of closing the ports.

The closure of the ports causes loss of daily crude oil production of 8,00,000 barrels, or a daily equivalent of $55 million, the NOC said in a statement.