Oil prices fell on Wednesday ahead of government data that is forecast to show falling US energy demand amid a sharp global economic downturn.
New York's main futures contract, light sweet crude for delivery in March, shed 31 cents from Tuesday's close to 34.62 dollars a barrel.
In London, Brent North Sea crude for April delivery dropped 1.48 dollars to 39.55 dollars a barrel.
The US Department of Energy will publish its weekly report on American energy inventories on Thursday, one day later than normal because of a public holiday in the United States last Monday.
The report, keenly awaited by traders, is expected to show that inventories had risen for an eighth week in the United States, the world's biggest energy consuming nation.
"After increasing at a rate of five million barrels per week since end-November, the increase in US oil and oil product stockpiles for the last two weeks has been a far more muted two to three million barrels per week," said Thierry Lefrancois of Natixis.
"With refinery utilisation rates surprising on the downside, crude oil stocks have kept increasing while stocks of oil products have begun to fall," Lefrancois said.
Amid deepening recession in the United States, crude oil inventories over the last seven weeks have risen to more than 350 million barrels as of the week of February 6.
The Federal Reserve said on Wednesday it now estimated the US economy to shrink 0.5 to 1.3 percent in 2009, instead of the prior estimate of between a 0.2 percent contraction and a 1.1 percent increase.
For 2010, the central bank expected the economy to bounce back to positive growth levels of between 2.5 percent and 3.3 percent, up from an earlier 2.3-3.2 percent forecast.
Growth in 2011 would accelerate to between 3.8 percent and 5.0 percent, significantly higher than 2.8-3.6 percent increase seen in the last forecast, the Fed said.
Oil prices have slumped from record highs above 147 dollars a barrel reached last July, as the market has been slammed by plunging demand for energy.
"Things are a mess ... The markets have been beaten badly and are a bit oversold so they may try to rally," said Phil Flynn of Alaron Trading. "A nice recovery should open up good opportunities to get repositioned."
The Organisation of Petroleum Exporting Countries (OPEC), which pumps 40 percent of the world's oil, cut output late last year by a total 4.2 million barrels per day in a bid to prevent further price falls.
New York's main futures contract, light sweet crude for delivery in March, shed 31 cents from Tuesday's close to 34.62 dollars a barrel.
In London, Brent North Sea crude for April delivery dropped 1.48 dollars to 39.55 dollars a barrel.
The US Department of Energy will publish its weekly report on American energy inventories on Thursday, one day later than normal because of a public holiday in the United States last Monday.
The report, keenly awaited by traders, is expected to show that inventories had risen for an eighth week in the United States, the world's biggest energy consuming nation.
"After increasing at a rate of five million barrels per week since end-November, the increase in US oil and oil product stockpiles for the last two weeks has been a far more muted two to three million barrels per week," said Thierry Lefrancois of Natixis.
"With refinery utilisation rates surprising on the downside, crude oil stocks have kept increasing while stocks of oil products have begun to fall," Lefrancois said.
Amid deepening recession in the United States, crude oil inventories over the last seven weeks have risen to more than 350 million barrels as of the week of February 6.
The Federal Reserve said on Wednesday it now estimated the US economy to shrink 0.5 to 1.3 percent in 2009, instead of the prior estimate of between a 0.2 percent contraction and a 1.1 percent increase.
For 2010, the central bank expected the economy to bounce back to positive growth levels of between 2.5 percent and 3.3 percent, up from an earlier 2.3-3.2 percent forecast.
Growth in 2011 would accelerate to between 3.8 percent and 5.0 percent, significantly higher than 2.8-3.6 percent increase seen in the last forecast, the Fed said.
Oil prices have slumped from record highs above 147 dollars a barrel reached last July, as the market has been slammed by plunging demand for energy.
"Things are a mess ... The markets have been beaten badly and are a bit oversold so they may try to rally," said Phil Flynn of Alaron Trading. "A nice recovery should open up good opportunities to get repositioned."
The Organisation of Petroleum Exporting Countries (OPEC), which pumps 40 percent of the world's oil, cut output late last year by a total 4.2 million barrels per day in a bid to prevent further price falls.
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