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Saudi Arabia's oil minister vowed that there would be no cuts to oil supply as oil prices dropped three percent on Wednesday, approaching an 11-year low.

Ali al-Naimi said Saudi Arabia would not change course from its strategy of keeping oil output steady, as a global crude glut has seen prices plummet over the past year.

"The increase in production depends on... the demand of the customers," Naimi told Reuters. "We meet our customers' demand, there is no longer a limit to production, as long as there is demand, we have the ability to meet demand."

Saudi Arabia - traditionally a swing producer - has been under pressure from other oil producing states to cut its output as low demand and over-supply push prices of oil down further.

Many oil exporters have been hit hard by a year of low prices, with all countries in the oil-producing countries in the Gulf region posting a deficit last year.

Saudi cut subsidies on petrol this week, increasing prices at the pump between 40-50 percent almost overnight. Riyadh is struggling to cope with a $98 billion deficit for 2015.

Part of the reason for the low oil prices is a massive surge in supply from the United States, now the world's largest producer of crude.

Analysts say Saudi Arabia has kept oil production artificially high in an attempt to force start-up oil companies in the United States to close, and for Riyadh to retain its huge market share.

However, the strategy does not appear to be working, and Saudi Arabia's King Salman has allegedly been criticised by other royals and Gulf leaders for not cutting production.

On Wednesday, an unusual build-up of reserves in the US saw oil prices tumble three percent in one day.

Crude inventories in the US were up by 2.6 million barrels last week, Reuters reported, something which oil analysts have described as unprecedented.

Chris Jarvis, analyst at Caprock Risk Management in Frederick, Maryland, said the trend of low oil prices was likely to continue through to the following year.

"This week's EIA data is just another bearish data point in a series of many that have dominated 2015 and will likely continue to do so heading into 2016," he told Reuters.

Meanwhile, oil producers are looking at new ways to cut costs and diversify their economies as low oil prices look set to be a permanent fixture in the near future.