Oil prices slipped Wednesday as U.S. inventories swelled with surplus crude and traders started to doubt whether OPEC would cut production further.
Benchmark crude for April delivery dropped $1.05 to $44.66 a barrel on the New York Mercantile Exchange.
The Energy Information Administration said crude supplies in the U.S. climbed unexpectedly by 700,000 barrels for the week ended March 6. Analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., expected a drop of 1 million barrels.
Meanwhile, investors realized OPEC may not cut production at the group's next meeting Sunday in Vienna. The Organization of Petroleum Exporting Countries has already announced output quota reductions of 4.2 million barrels a day, and some analysts had expected the 12-member group would slash another 500,000 barrels per day.
Oil officials from Saudi Arabia have said that instead of trimming production even more, OPEC should focus instead on making sure its members are in compliance with the previous cuts, analyst Phil Flynn said.
Flynn said Saudi Arabia may not be interested in trimming production more if other countries won't do the same.
"Are the Saudis getting sick of carrying the load for the cheaters in the cartel?" Flynn said in a research note. "Are the Saudi's getting ready to break ranks and force the other members of the cartel to either cut back more or just shut up?"
Oil prices had been rebounding from a low of $33.98 a barrel in February as U.S. crude inventories dropped and investors started to gain confidence that OPEC's cuts would effectively balance falling global demand.
Still, investors continue to be presented with daily batches of gloomy economic news.
Chinese oil imports have dropped 13 percent in the first two months of the year, and are now at their lowest level in more than two years, analyst Addison Armstrong said. Chinese manufacturers are struggling, with exports plunging 25.7 percent year-over-year in February, Armstrong said.
Automobile sales also are plunging around the world, according to Vienna's JBC Energy said. "In February, U.S. passenger car sales dropped by 39 percent year-on-year, while sales in Europe also fell sharply," JBC Energy said in a research note.
Elsewhere, Staples Inc. said Wednesday its fourth-quarter profit dropped 14 percent, though the results were related to last summer's acquisition of a Dutch rival dragged down results. Staples added that shoppers are spending less on computers, accessories and furniture. Sales fell 13 percent at stores in North America that were open at least a year, the company said.
Department store owner Neiman Marcus Inc. said it lost $509.3 million in the second quarter on a series of hefty write-downs totaling more than half a billion dollars.
In other Nymex trading, gasoline for April delivery fell nearly 5 cents to $1.25 a gallon, while heating oil slipped 2.4 cents to $1.175 a gallon. Natural gas for April delivery climbed 2.1 cents to $3.861 per 1,000 cubic feet.
Brent prices dropped 83 cents to $43.13 on the ICE Futures exchange in London.
Associated Press writers George Jahn in Vienna and Alex Kennedy contributed to this report from Singapore.