Brent crude oil slid lower as worries about Ukraine subsided and concerns about an oversupplied market drove prices.
The commodity traded at $106.45 at 8:15 GMT on Wednesday morning as the Federal Reserve meeting and US inventory data came into focus.
The American Petroleum Institute released a report on Tuesday which showed US crude inventories had risen by 5.9 million barrels last week. The figures marked the second consecutive week that US stocks.
increase more than expected as a result of rising imports and slowing refinery activity.
Now, investors are waiting for a report from the Energy Information Administration to confirm the numbers. Reuters reported that a poll of eight analysts showed they see a 2.6 million barrel increase being reported.
The data was concerning as many are starting to worry that global demand is waning as supplies increase. A temporary agreement to ease the sanctions keeping Iranian oil from the market has allowed the nation to rejoin the global oil market.
Iran has been taking advantage of the opportunity and exported higher levels of oil than allowed under the sanctions for four consecutive months. Selling mostly to Asia and Turkey, the nation exported more than one million barrels per day in February.
The closing of the Federal Reserve's policy meeting later on Wednesday will also play a key role in oil prices. Most expect that the bank will reduce its monthly asset.
purchases by another $10 billion, which would be negative to crude prices.
The bank is also expected to revise its forward guidance to maintain an accommodative policy despite the nation's falling unemployment rate.