West Texas Intermediate futures for September delivery fell to $50.24 (-1.22%); Brent crude declined to $56.58 (-0.81%) after late Tuesday data from the American Petroleum Institute surprised with a 2.3-million-barrel increase in U.S. crude inventories. A report from the U.S. Energy Information Administration is due today at 14:30 GMT, and analysts forecast a 1.6 million-barrels decline in stockpiles. Meanwhile a poll by Reuters showed that eight analysts expect U.S. commercial crude oil stocks to have risen by 2.3 million barrels on average in the week ended July 17.

"Any indication of rising oil inventories in this week's EIA weekly report is likely to weaken oil prices further," ANZ analysts said.