Slowdown concerns, gains in the dollar, and figures showing a rise in US stockpiles countered speculation that OPEC will cut output.
West Texas Intermediate fell to $78 a barrel after it rose 2.3% on Tuesday when Reuters reported that Moscow wants the group to cut production by about 1 million barrels a day at its Oct. 5 meeting. A host of banks including UBS Group AG have argued that the Organization of Petroleum Exporting Countries and its allies may reduce output to stem price declines.
According to people familiar with the figures, the US crude inventories swelled by more than 4 million barrels last week, according to the American Petroleum Institute. Later on Wednesday, official data will be released.
The US crude benchmark is on track to record its first quarterly decline in more than two years, hitting the lowest level since January earlier this week. The drop has been caused by recessionary concerns, hawkish central banks, including the Federal ReserveFederal Reserve, and the dollar's surge to a new record.
Commodity prices in the dollar are more expensive for most buyers because of the Bloomberg gauge of the US currency, which rose to its all-time high on Wednesday. Policymakers like James Bullard restate their intention to tame inflation after further Fed rate increases are on the cards.
The progress of Hurricane Ian is expected to make landfall on Florida's west coast late Wednesday, according to traders. US energy companies have idled about 190,000 barrels of daily crude production, about 11% of US Gulf of Mexico output, according to government figures.
Time spreads have been narrowing.