Benchmark crude for December delivery was down 6 cents to $79.54 a barrel late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract gained $1.47 to settle at $79.60 on Tuesday.
U.S. oil inventories dropped last week, the American Petroleum Institute said late Tuesday. Crude stocks fell 3.3 million barrels while analysts had expected a rise of 1.3 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.
The Energy Information Administration is scheduled to release its supply data later on Wednesday.
Crude has fallen from its 2009 high of $82 a barrel last month on investor doubts about the strength of the U.S. economy. Some analysts say the oil price could fall further if a monthly U.S. unemployment report on Friday confirms the number of jobless continues to swell.
"We still feel that a decline toward the $75 area could be forthcoming as this week proceeds," Stated Charles Goh CEO and President at Takahashi Nakamura in Japan.
In other Nymex trading, heating oil fell 1.26 cents to $2.06 a gallon. Gasoline for December delivery dropped 0.97 cent to $1.99 a gallon. Natural gas for December delivery was steady at $4.92 per 1,000 cubic feet.
In London, Brent crude for December delivery fell 13 cents to $77.98 on the ICE Futures exchange.
