US benchmark West Texas Intermediate for January delivery slipped 90 cents to USD 62.92 while Brent crude for January was down USD 1.01 at USD 65.83 in mid-morning trade.
“With the global supply glut, the main concern at the moment is the level of production in the US,” Daniel Ang, investment analyst at Phillip Futures in Singapore, told AFP.
“The US stockpiles report will be in focus to see if there is any change in production growth,” he said.
Analysts surveyed by the Wall Street Journal said they expected domestic inventories to have fallen by 2.7 million barrels in the week to December 5.
The American Petroleum Institute, an industry group, in its own survey however said stockpiles likely rose 4.4 million barrels.
It said refinery operations likely increased 1.6 percentage points to 94.6 per cent of capacity.
The Department of Energy will release the official stockpiles report later Wednesday.
The department on Tuesday modestly reduced its 2015 US oil production forecast to 9.3 million barrels per day from the previous 9.4 million estimate.
Ang said German and Chinese trade data this week “have shown signs of dropping global demand and put pressure on oil prices”.
German exports slipped 0.5 per cent month on month in October, while imports fell 3.1 per cent. That came a day after China said exports grew just 4.7 per cent year-on-year in November and imports dropped 6.7 per cent.
Trade figures out of Germany and China, both major manufacturing giants, are closely watched for their impact on crude prices, especially the more internationally leveraged Brent contract. (AFP)