Oil fell by more than $1 in early trade on Wednesday 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. light crude for May delivery fell $1.08 to $52.90 a barrel by 1055 GMT (6:55 a.m. EDT), after touching a near three-month high above $54 on Tuesday.
London Brent crude fell $1.02 to $52.48.
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 numbers today to be higher. The market is on the back foot at the moment," he said.
CAUTIOUS OPTIMISM
On Wednesday European stocks were little changed in early trade after four days of gains, as investors turned cautious ahead of key macroeconomic data and after sharp gains sparked by a U.S. plan for banks' troubled assets. .EU
The U.S. Energy Information Administration, a branch of the Department of Energy, will issue its separate weekly report on nationwide stockpiles on Wednesday.
On Tuesday night in the United States, President Barack Obama said he was seeing signs of economic progress in the housing market as he sought to reassure Americans he was on the right track.
Speaking with cautious optimism on Wednesday, a Chinese central bank adviser said China, the world's third-largest economy, was showing signs of improvement.
"Before (the economy) bottoms out, it has to bottom. I believe it has bottomed, with the stimulus package and signs of recovery in some industries," said Fan Gang, who sits on the Chinese central bank's monetary policy advisory committee, in a Reuters interview in Hong Kong.
