Crude Oil prices slumped about 2% to around $89.50 a barrel on Thursday on a sell-off sparked by an unexpected rise in U.S. crude stockpiles and worries that China might tighten monetary policy to fight inflation.

The steep drop in prices came as investors liquidated positions on the front-month U.S. February crude contract, which expired at the close, overshadowing upbeat U.S. economic data on jobs and housing.

Crude oil also came under pressure from a rising dollar after U.S. economic data fueled hope that the country's economic recovery was on track.