OilNSE 1.69 % prices dropped on Wednesday after an industry group reported that US crude inventories rose last week, defying analyst expectations for a significant reduction.
Brent futures were down 40 cents, or 0.6 per cent, at $71.76 a barrel by 0027 GMT. They rose 32 cents to $72.16 a barrel on Tuesday, after earlier touching a three-month low.
US West Texas Intermediate crude was down 27 cents, or 0.4 per cent, at $67.82. It settled up 2 cents at $68.08 a barrel the session before, coming off a nearly one-month low.
The benchmarks had steadied after big declines on Monday and last week as supply disruptions in Venezuela came to the fore and as analysts had been forecasting a decline of 3.5 million barrels in US inventories for the week through July 13.
But the spectre of oversupply quickly returned, with a rise of more than 600,000 barrels in US crude stockpiles, reported by the American Petroleum Institute late on Tuesday.
Gasoline stocks rose by 425,000 barrels, compared with expectations in a Reuters poll for a 44,000-barrel decline.
Distillate fuels stockpiles, which include diesel and heating oil, rose by 1.7 million barrels, compared with expectations for an 873,000-barrel gain, the data showed.
Refinery crude runs fell by 279,000 barrels per day, the API data showed.
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