Oil prices remained near $87 a barrel during Asian trading hours Thursday as investors were awaiting the key monetary decisions from the European Central Bank (ECB) and Bank of England (BoE).

Light sweet crude for August delivery declined 0.89 percent or 78 cents to $86.88 a barrel in electronic trading on the New York Mercantile Exchange during Asian trading hours while Brent crude oil futures for August delivery fell 0.27 percent 27 cents to $99.50 a barrel on the ICE futures exchange in London.

Investors are hoping that the European Central Bank would cut its main refinancing rate to below 1 percent when its governing council meets Thursday as recent economic reports, including rise in unemployment and weak manufacturing activities, heightened fears that the region's economic problems are worsening.

We continue to forecast a 25bp cut in the ECB's main refinancing rate, to 0.75 percent, based on weak economic data, lower inflationary pressures and tighter monetary conditions while the BoE is expected to leave its key policy rate unchanged at 0.50 percent and will announce an extension of GBP50bn to its asset purchases program bringing it up to GBP375bn, said a note from Credit Agricole.

Meanwhile, fears of a widening euro zone debt crisis and recent soft economic reports from the world's largest and second largest economies raised concerns of a further global slowdown and triggered worries over global oil demand.

The big picture has not been fixed and overall it's still looking quite bearish on oil demand growth. Of the three big economic blocs - the European Union is facing recession, the United States is struggling ... and the latest data seems to be showing that China's economy is slowing down considerably, Tony Nunan, a Tokyo-based risk manager at Mitsubishi Corp, told Reuters.

However, oil prices got some support from renewed tensions over Iran's nuclear program. Tehran is considering a bill to block the Strait of Hormuz to oil tankers linked to countries that support sanctions against it. Iran also tested ballistic missiles capable of attacking Israel as part of the ongoing military drills Tuesday. It also threatened to destroy the U.S. military bases immediately following any attack on its own territory.