However, a revival from lower levels can not be ruled out in the next quarter as U.S. sanctions on Iranian oil exports are due to take effect in November that may cut two-third of its exports and in turn tighten global supply. Both had fallen more than 2% in midday trading.
Oil prices jumped on Tuesday after OPEC's top producer Saudi Arabia reported that it had cut its production in July compared to June.
"Oil prices. fell after the API inventory data showed an unexpected crude build last week", said William O'Loughlin, investment analyst at Australia's Rivkin Securities. Meanwhile, U.S. output, which had surged to a record last month, has slowed in recent weeks.
Prices fell earlier in the session by more than $1 a barrel after inventories at the Cushing, Oklahoma, delivery hub for WTI rose by about 1.7 million barrels in the week through August 10, traders said, citing data from market intelligence firm Genscape.
In refined products, analysts polled by Platts were looking for USA gasoline inventories to have declined by 1.0 million barrels the week ending August 10, and distillate inventories to have risen by 250,000 barrels as United States economic growth supports higher demand for refined products. The contract climbed 82 United States cents to US$67.63 last Friday. Total volume traded was about 42% below the 100-day average.
Brent for October settlement declined 20 cents to end the session at $72.61 a barrel on the London-based ICE Futures Europe exchange, and traded at a $6.04 premium to WTI for the same month. The contract advanced 74 USA cents to US$72.81 on Friday.
Typically, crude futures trade inversely to the greenback. Brent, the global benchmark, shed 0.3% to $72.74 a barrel. The contract lost 1.2 per cent on Friday, and was little changed last week. Riyadh told Washington in June it would increase output in attempt to make up for Iranian barrels taken off the market by USA sanctions. That could take more than a million barrels of Iranian oil out of global circulation, which could then push oil prices higher again.
That's because the risks to oil supply stability that will increase later this year could result in higher oil prices, and thus impact demand growth.
With more United States sanctions looming, anxiety over the developments in Turkey have been weighing on markets.
Turkey's currency has been a casualty of a deepening crisis spurred by the administration's growth-at-all-costs agenda and a worsening spat with the USA, which has sanctioned the country.