The oil complex turned lower Wednesday after data showed an unexpected rise in US commercial crude stocks for last week.
NYMEX October crude settled 46 cents lower at $94.42/barrel, while ICE November Brent closed 8 cents down at $98.97/b.
Data from the US Energy Information Administration showed stocks rose 3.67 million barrels, to 362.27 million barrels, for the reporting week ended September 12. That was counter to analysts' expectations of a 400,000-barrel draw.
In refined products, NYMEX October RBOB settled 1.04 cents higher at $2.5692/gal, while NYMEX October ULSD closed up 1.12 cents at $2.7451/gal.
"The EIA gave a big number on crude stock build which in and of itself is fairly bearish," Tony Headrick, energy analyst at CHS Hedging, said.
"We resisted moving sharply lower, due to a combination of support levels just under $92 and refiners operating at 93%, and these factors led to limited amount of weakness in today's session," he said.
US refineries are operating at 93% of total capacity, EIA data showed. Total crude runs are 7.1% above the five-year EIA average for the same reporting week.
Other factors supporting prices stemmed from supply issues related to fighting in Libya and OPEC production, Headrick said.
Libya's state-owned National Oil Company closed its second-largest export terminal Wednesday after rocket fire landed close to oil infrastructure in the western town of Zawiya (See story, 1543 GMT).
The Sharara oilfield, which supplies oil to the Zawiya export facility and a nearby refinery, will reopen once fighting stops, an NOC spokesman said.
Libyan crude production fell to 700,000 b/d, down from 870,000 b/d earlier in the week, reversing a trend since August of rising output despite an escalation of violence and political instability.
In August, rebels ended their occupation of the eastern ports of Ras Lanuf and Es Sider, allowing production to rebound from lows of 150,000 b/d.
The NOC had said earlier this week Libyan crude production was on pace to reach 1 million b/d by late September, a target that might be out of reach given the latest setback.
The recent drop in crude prices has prompted discussion whether OPEC would reduce its output ceiling at its next ministerial meeting November 27.
OPEC's Secretary-General Abdalla el-Badri on Tuesday said the group had expectations of lower demand next year. OPEC's latest monthly report, released last week, forecast demand for its crude in 2015 will drop 250,000 b/d on average below 2014 levels.
Traders, meanwhile, were watching the US Federal Reserve for clues regarding future interest rate movements after the conclusion of its latest policy meeting Wednesday.
A statement by the Federal Open Market Committee indicated it intends to keep its key overnight lending rate at a record low for a "considerable time."
"There were various aspects to the FOMC statement the market had to digest," Jim Ritterbusch, president of Ritterbusch & Associates, said.
"At the end of the day, it appears the Fed is likely to maintain a loose policy which is accommodating to lower interest rates, and that should keep speculators enticed toward oil as an alternative investment class," he said.
