Oil prices slipped on Wednesday as the European Union seeks to circumvent US trade sanctions against Iran, and on weaker US gasoline prices.
Brent futures fell 36 cents, or 0.6 percent, to settle at $61.14 a barrel, while the most active US West Texas Intermediate (WTI) crude contract for March fell 39 cents, or 0.7 percent, to settle at $52.62.
France's foreign minister said he expected a European-backed system to facilitate non-dollar trade with Iran and bypass fresh US curbs imposed after Washington quit a landmark nuclear deal, would be established in coming days.
Peter Cardillo, chief market economist at Spartan Capital Securities in New York said that EU announcement "knocked the wind out of oil prices."
Analysts also said falling US gasoline prices and rising crude output in the United States were also pressuring the crude market.
"We are paying particular attention to weakening NYMEX crack spreads where an increasingly heavy gasoline market is providing a limiter on near term WTI gains," Jim Ritterbusch, president of Ritterbusch and Associates in Chicago, said in a report.
The crack, or spread, between US gasoline futures and WTI crude fell to $5.97 a barrel, its lowest since 2013.
Both US crude and product futures extended their losses in post-settlement trade after an industry report showed that US crude stockpiles rose sharply last week, while gasoline and distillate inventories built.
Data from the American Petroleum Institute showed crude inventories increased 6.6 million barrels, compared with analysts' expectations for a decrease of 42,000 barrels.
Gasoline stocks rose by 3.6 million barrels, compared with analysts' expectations in a Reuters poll for a 2.7 million-barrel gain. Distillate fuels stockpiles gained by 2.6 million barrels, compared with expectations for a 229,000-barrel drop, the API data showed.
If the weekly product builds are confirmed by government data on Thursday at 11 a.m. (1600 GMT), it would be the eighth rise in a row for gasoline, and the fifth straight build for both distillates and gasoline.
US CONSIDERS VENEZUELA SANCTIONS
The Trump administration ratcheted up pressure on Venezuela's President Nicolas Maduro on Wednesday, announcing US recognition of the country's opposition leader as interim president and signalling potential new sanctions against its vital oil sector.
Potential US sanctions on Venezuela's crude oil exports, however, would hit US refiners that are its biggest customers, as the OPEC nation would likely be forced to send more crude to China, India or other Asian countries, traders said.
The US share of Venezuelan exports has fallen in recent years with more shipments going to Russia and China, largely through oil-for-debt repayment structures.
"It would make a tight market even tighter. If it happens, it would be an unambiguous headwind for (US) refiners already struggling to find supplies," said Bob McNally, president of Rapidan Energy Group, an energy consultancy in Bethesda, Maryland.
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