Brent Crude Hits 16-month Low Under US$99

Brent crude dropped to a 16-month low under $99 per barrel on Wednesday, stretching its losses into a fifth session amid continued worries about rising supplies and weak global demand.

While a larger-than-expected fall in weekly U.S. crude stocks kept a floor under oil prices, gains were curbed by a firmer U.S. dollar that makes commodities priced in the greenback more expensive for holders of other currencies.

The dollar index stood near a 14-month high, with some investors betting the U.S. Federal Reserve would raise interest rates earlier than previously thought.

Brent crude was trading down 27 cents at $98.89 a barrel at 0719 GMT, off a low of $98.85 hit earlier in the session - the lowest intraday price since May 1, 2013. U.S. crude was down 21 cents at $92.54 a barrel.

"I wonder how much further Brent could fall after falling below the psychologically important $100," said Ken Hasegawa, a commodity sales manager at Newedge Japan.

To be sure, the summer driving season is over, and right now it's the drop-off season till the next peak demand, and there's no worries over supply. America has entered the seasonal maintenance and demand is weak. But the market will eventually recover gradually."

Data from industry group the American Petroleum Institute showed a 1.9 million barrel decline in U.S. crude stocks last week, versus analysts' expectations for a drop of 1.1 million. U.S. gasoline stocks unexpectedly rose by 719,000 barrels, while distillate stocks gained by 1.7 million barrels.

Data from the U.S. Department of Energy's Energy Information Administration will be released later in the day at 1430 GMT.

Oil prices on both sides of the Atlantic have dropped over the past two months, dragged down by soaring U.S. shale oil production that has replaced many imports from West Africa, Europe and other regions, leading to a supply glut in the Atlantic Basin and Asia.

Energy Aspects, a London-based oil consultancy, said in a note on Monday that about 50 million barrels of oil are stored in floating storage, split between Saldanha Bay in South Africa and Asia.