Oil fell as Saudi Arabia, the world's biggest exporter, signaled it won't act to balance the market while forecasts for US crude inventories to rise bolstered speculation that a global glut will persist.

Futures dropped as much as 2 percent in New York. Supply and demand and the "rules of economics will govern", Khalid Al-Falih, the chief executive officer of Saudi Arabian Oil Co, said at a conference in Riyadh. Crude stockpiles probably expanded for a third week, a Bloomberg News survey showed before an Energy Information Administration report on Wednesday.

Oil slid almost 50 percent last year as the US pumped at the fastest pace in more than three decades while the Organization of Petroleum Exporting Countries resisted calls to cut supply. Saudi Oil Minister Ali Al-Naimi, who has said non-OPEC producers should reduce their output first, met with the ambassadors of Russia and Norway to discuss market stability, according to the kingdom's official news agency.