Brent crude dropped to a 16-month low under $99 per barrel on Wednesday, stretching its losses into a fifth session amid continued worries about rising supplies and weak global demand.
While a larger-than-expected fall in weekly US crude stocks kept a floor under oil prices, gains were curbed by a firmer US dollar that makes commodities priced in the greenback more expensive for holders of other currencies.
Brent crude was trading down 27 cents at $98.89 a barrel at 0719 GMT Wednesday, off a low of $98.85 hit earlier in the session - the lowest intraday price since May 1, 2013. US crude was down 21 cents at $92.54 a barrel.
Data from industry group the American Petroleum Institute showed a 1.9 million barrel decline in US crude stocks last week, versus analysts' expectations for a drop of 1.1 million. US gasoline stocks unexpectedly rose by 719,000 barrels, while distillate stocks gained by 1.7 million barrels.
Data from the US Department of Energy's Energy Information Administration will be released later in the day at 1430 GMT.
Global Supplies Weigh
Oil prices on both sides of the Atlantic have dropped over the past two months, dragged down by soaring US shale oil production that has replaced many imports from West Africa, Europe and other regions, leading to a supply glut in the Atlantic Basin and Asia.
Energy Aspects, a London-based oil consultancy, said in a note on Monday that about 50 million barrels of oil are stored in floating storage, split between Saldanha Bay in South Africa and Asia.
Investors are now eyeing the Gulf Arab oil ministers' annual meeting on Thursday in Kuwait which could include discussions about oil prices now that Brent has dropped below the $100 a barrel level acceptable to OPEC.
Ukraine also remained in focus.
The United States was putting the finishing touches to possible new sanctions on Russia's defence, energy and financial sectors over its intervention in Ukraine, the US State Department said on Tuesday.
"There's been little impact of Russian sanctions on energy firms, and the sanctions could be strengthened a little but the impact is likely to be limited," Tomomichi Akuta, senior economist at Mitsubishi UFJ Research & Consulting, said.
European Union Trade Commissioner Karel De Gucht called on the United States to export oil and natural gas to Europe under a transatlantic trade deal, in part to reduce the region's dependence on Russian energy resources.
The market was also paying attention to rising tension in South Sudan. China has begun deploying 700 soldiers to a UN peacekeeping force in South Sudan to protect oil fields and Chinese workers amid a rebellion in the African country, the Wall Street Journal reported.
