Industry group the American Petroleum Institute was expected to report Tuesday afternoon that U.S. commercial crude stocks rose last week while inventories of distillates fell and gasoline supplies remained steady, a Reuters poll showed.
The U.S. Department of Energy's statistical arm the Energy Information Administration will release its inventory data on Wednesday.
The Reuters poll forecast crude stocks rose 300,000 barrels on average last week.
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"You have suggestions of an anaemic demand story for oil last week," said James Williams, energy economist at WTRG Economics in London, Arkansas.
A strong dollar initially weighed on oil as the greenback hit a seven-year high against the yen. By midmorning though, the dollar was down against a basket of currencies, but crude prices continued to slide.
Fear of supply disruptions in Libya, where a rival government seized the country's capital and took control of its most productive oilfield, El Sharara, helped limit the downside in oil earlier in the session, traders said.
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Falling crude prices have had little impact on shale oil drilling in the United States, with output from the fastest-growing and largest shale fields showing no sign of slowing, a separate EIA report said on Monday.
JPMorgan slashed its 2015 Brent price forecast by $33 to $82 per barrel on Monday, citing supply pressures in the Atlantic Basin and the apparent inability of OPEC member states to work cohesively to cut production.