Oil fell by more than $1 on Wednesday to below $53 a barrel after weak export data from Japan and as investors paused to reassess bank clean-up plans, halting a global equities rally.
Japan, the world's second-largest economy, posted a record drop in February for exports -- down by 49.4 percent -- as global demand for Japanese cars and electronics evaporated.
Bearish supply and demand data in the world's largest oil consumer the United States and in third-largest consumer Japan also pushed prices lower.
U.S. crude inventories rose last week by 4.6 million barrels to 345.5 million barrels, data from industry group American Petroleum Institute showed on Tuesday, with imports rising and refinery utilization down.
In Japan, crude oil import volumes fell by 13.9 percent in February, their lowest tally for the month in 20 years, preliminary data from Japan's Ministry of Finance showed.
"The Japanese numbers certainly spooked the market," said Rob Montefusco, a commodities trader at Sucden Financial in London.
"Crude numbers for the API data were bigger than expected, and we're looking for the DOE (Department of Energy) numbers today to be higher. The market is on the back foot at the moment," he said.
U.S. light crude for May delivery fell $1.28 to $52.70 a barrel by 1237 GMT (8:37 a.m. EDT), after touching a near three-month high above $54 on Tuesday.
London Brent crude fell $1.33 to $52.16.
The U.S. Energy Information Administration, a branch of the Department of Energy, will issue its separate weekly report on nationwide stockpiles on Wednesday.
CAUTIOUS OPTIMISM
Analysts said an excess of crude supply on world markets would not disappear soon, as no demand was surfacing to mop up the excess, and last week's strong rally might have been an overly earnest response to U.S. government stimulus plans.
"The price rise we saw in the past week was a little early, a little excessive. There's still not a lot of demand out there," said Simon Wardell at Global Insight, an oil trading advisory.
An expanded Reuters poll of 15 analysts on Tuesday showed an average forecast build of 1.2 million more barrels in the week to March 20, with gasoline supplies down by 600,000 barrels.
"It's a market not used to 6 million barrels of spare capacity out there. Today we're getting a bit more gloom from the American package," said Wardell.
