Oil fell further below $37 a barrel on Wednesday as US crude stockpiles rose to a new record, underlining the extent of a supply glut and countering support from producer efforts to tackle it.

Crude inventories rose by 10.4 million barrels, the US government's Energy Information Administration (EIA) said in its weekly report released at 1530 GMT, much more than analysts had expected.

Global benchmark Brent crude was down 45 cents at $36.36 a barrel by 1548 GMT. On Tuesday, it reached $37.25, the highest in almost two months. US crude, also known as WTI, was down 55 cents at $33.85.

"Today's EIA data will do very little to help oil's recent bounce," said Chris Jarvis, analyst at Caprock Risk Management in Frederick, Maryland.

"In short, it's difficult to make a bullish case. Signs that the glut in oil and reversal of the building trend will subside any time soon seems distant."

The inventory rise was even larger than the 9.9 million-barrel increase reported on Tuesday by industry group the American Petroleum Institute (API). The API report had weighed on prices earlier in the session.

Brent has risen 34 percent from a 12-year low of $27.10 hit on Jan. 20, adding to expectations that further declines may not be on the cards. An analyst at the International Energy Agency said on Tuesday prices appeared to have bottomed.

Meanwhile, in another development, Russia's Rosneft, the world's biggest listed oil producer by volume, has started floating the idea of a domestic production cut to balance the global market as the firm faces a natural decline this year, two industry sources said.

It was not immediately clear whether Rosneft was proposing that its own output be reduced or that production across all Russian energy firms go down.

A reduction in Rosneft's output alone would be offset by growth at other producers. According to Russian Energy Ministry data, Gazprom Neft, Bashneft and Tatneft showed growth in February.

Russia, Saudi Arabia, Qatar and Venezuela reached a preliminary agreement last month in Doha to freeze oil production for this year at levels reached in January, in a move to curb surplus supply on the global oil market.

Following a meeting on Tuesday with the heads of Rosneft, Lukoil, Gazprom Neft, Bashneft, Surgutneftegas and others in the Kremlin, Russian President Vladimir Putin said on Wednesday that they agreed to stick to the Doha deal.

But in opening remarks on Tuesday, Putin said "some had more radical proposals". He did not elaborate.

Rosneft's proposal would go further than the freeze already agreed. The two industry sources told Reuters that Rosneft was proposing a cut in production as it will face a natural decline this year in any case.

"This is not something new for the market - everyone has heard this and everyone is discussing this," a source at a major oil producer said.-Reuters