Poor demand and abundant supplies, which pushed down the European benchmark to a 26-month low this week, have kept oil prices below $100 for more than a week.
Brent crude for November delivery was down 51 cents at $98.46 a barrel by 0637 GMT. The October U.S. crude contract fell 54 cents to $93.88.
“There’s nothing to push it higher. The dollar is getting stronger and the overall market is weak with high inventories,” said Tony Nunan, oil risk manager at Mitsubishi Corp in Tokyo.
<p>'Considerable time' remains appropriate: Yellen</p> <p>CNBC's Steve Liesman asks Federal Reserve Chair Janet Yellen about the inclusion of the Fed's "considerable time" phrase in the statement, and if the statement is a form of forward guidance.</p>
The dollar hit its highest in more than four years against a basket of currencies amid indications that an increase in U.S. interest rates might happen faster than expected when the Federal Reserve starts tightening monetary policy.
A stronger dollar makes dollar-priced commodities such as oil more expensive for buyers using other currencies.
U.S. crude stocks rose 3.7 million barrels last week, defying analysts’ forecasts for a drop of 1.6 million barrels, due to climbing imports and lower refinery run rates, data from the Energy Information Administration data showed.
But Nunan said oil prices may be approaching their bottom, having fallen steeply from June and with markets looking forward to a potential output cut by the Organisation of the Petroleum Exporting Countries (OPEC).
“We’ve come down so far that now with talks of OPEC cutting supply, I think we are pretty close to the bottom and the market could be moving sideways from here,” Nunan said.
OPEC Secretary General Abdullah al-Badri said on Tuesday that a 500,000-barrel per day cut in OPEC’s oil supply to 29.5 million bpd in 2015 was possible, although that was downplayed by other delegates who expected stronger winter demand to boost prices.
Prince Abdulaziz Bin Salman Bin Abdulazi, deputy oil minister of Saudi Arabia, OPEC’s swing producer, said that short-term price moves have “little meaning” for the kingdom. He views long-term oil market fundamentals as “robust”.
The market could also draw support from investors looking to purchase oil contracts to cover an open short position.
“We could see some short-covering at some stage soon, given the losses we have seen. And some pullback on the selling which has been overboard,” said Ben Le Brun, market analyst at OptionsXpress in Sydney.
Brent has lost around 15 percent since hitting a nine-month peak of $115.71 in June, but potential supply risks are helping to keep a floor under oil prices.
Libya’s oil production fell by about 200,000 bpd due to an outage at the El Sharara field, while Nigerian oil unions continued a strike which could affect exports.