Brent crude futures fell 23 cents, or 0.2 percent , to $96.08(£79.52) a barrel at 0323 GMT. U.S. West Texas Intermediate crude futures declined 28 cents, or 0.3 percent, to $90.22 (£74.97) a barrel.
According to industry data, the key reason for the fall in oil prices is the unexpected increase in supply to the United States.
This eased ongoing concerns from investors about supply at least on a temporary basis.
U.S. crude stocks rose by around 2.2 million barrels for the week ended Aug. 5, according to market sources citing American Petroleum Institute figures.
According to Reuters, industry analysts believe that crude inventories will rise by 100,000 barrels.
Official US government data will be released at 10:30 am Eastern Daylight Time (15:30 GMT).
Edward Moya, a senior market analyst at OANDA, argued that prices were unlikely to fall much further due to ongoing worldwide supply issues.
He also argued that the the Iran nuclear deal talks could be crucial in improving the supply issue.
He said: “Whatever crude demand destruction that occurs from a weakening global economy won’t be able to drag down oil prices much lower given how low the supply outlook remains.
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A senior EU official told Reuters that he expected a final decision on the proposal within “very, very few weeks”.
On Tuesday both oil benchmarks were volatile with both rising and falling by more than $1 a barrel during the session.
Investors also weighed up predictions of a long term recession which would not only slow economic growth, but also demand for oil.
They also digested the news that some oil exports had been suspended on the Russia-to-Europe Druzhba pipeline that transits Ukraine.
Ukraine halted oil flows on the Druzhba oil pipeline to parts of central Europe because Western sanctions had prevented a payment from Russia for transit fees from going through.
Southernly flows along the Druzhba pipeline have been affected however, the supplies to Germany and Poland were still flowing.