Oil fell by more than a dollar toward $44 a barrel on Wednesday as further evidence of a large drop in global crude demand emerged.
Crude imports into China, the world's second-largest oil consumer, saw a surprise 15 percent drop in February, extending an 8 percent drop in January, as oil firms scaled back purchases after heavy stockpiling last year and on slow domestic demand.
The low crude imports came after data released earlier on Wednesday showed China's exports tumbling in February as the world's third-largest economy felt the full force of the global financial crisis.
The Chinese crude data was really quite poor, and that's stalled any move toward $50 a barrel, Sucden Financial trader Robert Montefusco said.
Prices are going to struggle to get a great deal higher given the extent of the economic problems we're seeing in the world.
U.S. light crude for April delivery fell $1.12 cents a barrel to $44.59 by 1305 GMT (9:05 a.m. EDT), having pulled back sharply on Tuesday from a two-day rally which saw prices rise above $48 a barrel for the first time since January.
Brent fell 70 cents to $43.26 a barrel.
Oil prices have collapsed by more than $100 a barrel since July, as a slowing world economy consumes less fuel.
German manufacturing orders dropped by 8 percent in January alone, data on Wednesday showed, indicating a deeper than previously expected recession in Europe's largest economy.
Crude prices have been underpinned by expectations the Organization of the Petroleum Exporting Countries may announce further production cuts when the producer group meets in Vienna on Sunday.
OPEC has already curbed member output quotas by a total of 4.2 million barrels per day (bpd) since September in a bid to boost prices. Analysts estimate OPEC members have successfully implemented around 80 percent of those cuts.
Opinion within OPEC appears split as to whether further production cuts are needed, or whether the group should push for tighter compliance with existing quotas.
Qatar's energy minister Abdullah al-Attiyah told Reuters on Wednesday a further 800,000 bpd needed to be removed from the market before OPEC discussed further cuts.
But Algeria, Venezuela and Libya have all raised the prospect of another OPEC supply reduction.
Supportive rhetoric from OPEC is likely to keep prices intact ahead of the meeting, but if there are no changes to current production levels then the market could well be disappointed, said VTB Capital analyst Andrey Kryuchenkov.
U.S. FUEL INVENTORIES
Later on Wednesday, investors will be watching the release of the U.S. Energy Information Administration's (EIA) weekly snapshot of U.S. fuel stocks data to try and gauge how demand is holding up in the world's largest energy consumer.
Analysts polled by Reuters this week forecast the data will show a 400,000 build in crude oil stocks and a 400,000 barrel drop in gasoline stocks.
However, data released by industry group the American Petroleum Institute on Tuesday showed an unexpected 1.7 million barrel rise in gasoline stocks and a 419,000 barrel fall in U.S. crude stocks.
The EIA's monthly oil market report, released on Tuesday, forecast world oil demand would contract at an even faster rate than previously expected. The EIA said world oil demand would fall by 1.38 million bpd to 84.27 million bpd in 2009.
The weekly EIA fuel stocks data will be released at 1430 GMT (10:30 a.m. EDT).
Additional reporting by Maryelle Demongeot in Singapore, editing by Keiron Henderson)