Oil prices were also dragged down by statements from Venezuelan Oil Minister Eulogio Del Pino who said that oil markets were oversupplied by about 10 per cent.
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Brent crude oil futures were trading at $45.45/bbl at 6:28 a.m. CT (11:28 GMT), down 50 cents day on day and a near three-week low.
He added that any deal would probably have a caveat allowing Nigeria, Libya and Venezuela as well as Iran to lift production levels if they can, meaning that any freeze could see higher production from OPEC.
The American Petroleum Institute reported a 7.5 million barrel draw in US crude oil supplies on Tuesday, instead of the build that many expected.
U.S. West Texas Intermediate (WTI) crude futures were down 25 cents at $43.05 a barrel.
Meanwhile, the dollar fell against other major currencies Wednesday after the Federal Reserve left short-term interest rates unchanged.
Oil producers from the Organisation of the Petroleum Exporting Countries (OPEC) and Russian Federation plan to meet in Algeria next week to discuss measures to rein in the oversupply, including an oil production freeze at current output levels, but analysts said they did not expect significant results.
However, many analysts are still not sure about a deal between the oil producing giants and expects the prices to drop further in the upcoming days. In the subsequent week to Sept 9, there was another decline of 559,000 barrels.
Traders said the main WTI price driver was American Petroleum Institute data showing a 7.5 million barrel draw to 507.2 million barrels in USA crude inventories.
“OPEC members will not agree on a production freeze at the end of September at the meeting in Algiers”.
Gasoline futures settled up 3.44 cents, or 2.5%, at $1.399 a gallon.
Tuesday’s API report will either be validated or discredited by the U.S. Energy Information Administration’s official crude supplies report Wednesday morning. Prices dropped 7 cents, or 0.2 percent, to $45.88 a barrel on Tuesday.
USA commercial crude oil inventories fell ~0.6 MMbbls (million barrels) for the week ending September 9-compared to the previous week.
Technical market indicators were also weak, with WTI likely to test support at $42.78/bbl soon, after which a fall towards $42 would be likely, according to Reuters analyst Wang Tao. Other positive momentum came from indication that the Organization of the Petroleum Exporting Countries, or OPEC, is getting more serious about freezing oil production output.
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U.S. crude imports rose last week by 77,000 barrels per day, but the rate dropped sharply in the U.S. Gulf, falling about 500,000 bpd to 2.9 million bpd, close to the record low of 2.5 million bpd hit in the week to September 2 when the storm disrupted supplies.
