Oil retreated on Wednesday, a day after hitting a record high above $100 a barrel, as investors focused on a U.S. inventory report expected to show crude stockpiles rose for a sixth week.
U.S. crude stocks were expected to rise by 2.3 million barrels. The Energy Information Administration report will be released on Thursday, a day later than usual, due to Monday's holiday.
Oil slid $1.21 to $98.80 a barrel by 7:00 a.m. EST, having risen nearly 5 percent, or $4.51, the biggest ever daily gain, to a record peak of $100.10 on Tuesday. London Brent crude fell $1.47 to $97.09.
It's a bit of a correction after the strong rally yesterday, said Christopher Bellew, senior vice president at Bache Commodities. It looks like it's going to be a downward day today.
U.S. crude hit a new peak of $100.10 on Tuesday, 1 cent beyond the previous high reached on January 3.
Strength in gas oil limited the decline for crude because of a tight market in Europe and cold weather, dealers said. The March gas oil contract was up $2.75 at $882 a tonne.
Concern that the Organization of the Petroleum Exporting Countries will hold or even cut output when it meets on March 5 as well as uncertainty about Venezuelan and Nigerian supplies, sent prices back to triple digits.
Libya's top oil official and OPEC sources said on Tuesday that the exporter group would find it hard to cut oil output because of rising prices.
News that Nigerian oil delta rebel leader Henry Okah had been shot dead, later debunked by a government spokesman, U.S. refinery problems and the row between Venezuela and Exxon Mobil also lifted prices.
Oil's gain came in tandem with record highs for platinum and soybeans as the commodities complex remained in favor among investors seeking shelter from range-bound share markets.
The rally may be less indicative of narrowly defined energy fundamentals than of fund capital's quest for safe havens and financial hedges against inflation, said Antoine Halff, deputy head of research at brokers Newedge.
(Reporting by Alex Lawler; additional reporting by Chua Baizhen in Singapore; editing by James Jukwey)