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NEW YORK (CNN/Money) - Crude oil prices tumbled 3 percent Wednesday reaching a seven-week low, after a government report showed a rise in crude inventories and a buildup in gasoline stocks ahead of summer.

Light crude prices for the May contract broke the $51 mark, sinking $1.64 to $50.22 a barrel during late afternoon trading on the New York Mercantile Exchange.

London Brent also pierced $51, dipping $1.43 to $50.48.

Prices have fallen nearly 14 percent from last week's record high of more than $58, helped by an increase in production from Saudi Arabia and signs global demand is beginning to slow.

"This is all-around bearish. Demand numbers were so-so and import numbers were big," Jan Stuart, an analyst at Fimat USA bank told Reuters.

Releasing a report on Tuesday, the Energy Information Administration said that crude oil inventories rose by 3.6 million barrels in the week ended April 8th from the previous week, much higher than the 450,000-barrel rise forecast by Briefing.com.

Over the last nine weeks, crude oil inventories, already at their highest level in nearly three years, have increased by 26.4 million barrels to 320.7 million barrels.

Total motor gasoline inventories rose by 800,000 barrels to 213.1 million last week, also surpassing analysts' expectations for levels to remain unchanged. The rise in gasoline stocks follows last week's government report that said American drivers' demand for gas would be up 1.8 percent this summer compared to last year.

"The April IEA report supports our belief that rising inventories, moderating demand growth and Saudi Arabia's commitment to put more oil into the market will put downward pressure on oil prices," Merrill Lynch said in a report.

OPEC powerhouse Saudi Arabia added pressure to prices by telling oil majors and Asian refiners that it would boost their May crude oil supplies by 10 percent or more, effectively putting as much as 500,000 bpd of new oil on the market.

Middle East Gulf producers are eager to lift output now to encourage stock-building in the coming months, creating a buffer for strong demand later this year, although OPEC members Nigeria, Algeria and Venezuela have said more oil is unwarranted.

OPEC President Sheikh Ahmad al-Fahd al-Sabah said this week the group was on track to boost supplies by 500,000 bpd next month, pressing ahead with a second increase despite prices having slipped back below the cartel's $55 threshold.

"The fear is as we get close to $50, OPEC may step in. $50 is a number that will be difficult to break on the downside," Nauman Barakat, an analyst at Refco Trading in New York, told CNN/Money.

The Organization of the Petroleum Exporting Countries raised output limits by 500,000 bpd in March to 27.5 million, leaving room for a second increase if oil prices remained high.

Click here for CNN/Money's special report - "Oil Crunch 2005".