Oil under pressure from eurozone crisis

New York's main contract, West Texas Intermediate crude for delivery in June shed $1.03 to $92.95 per barrel, having earlier plunged to $91.81 -- which was the lowest level since early November.

Brent North Sea crude for June slid 61 cents to $111.63 a barrel in late afternoon London deals on Wednesday, ahead of its expiry. The contract had hit a near four-month low of $110.04 on Monday.

The US government's Energy Information Administration (EIA) revealed Wednesday that American crude reserves soared by 2.1 million barrels in the week ending May 11.

That was far higher than market expectations for a gain of 1.4 million barrels, according to analysts polled by Dow Jones Newswires, and indicated weaker-than-expected demand in the world's biggest oil consuming nation.

However, the EIA added that US distillates inventories, which include diesel and heating fuel, sank by almost one million barrels last week. Analysts had pencilled in a lighter drop of 200,000 barrels.

And gasoline or petrol stockpiles tumbled 2.8 million barrels, which was far heavier than expectations for a 300,000-barrel drop.

"The oil market continues to remain under pressure following the fragile economic conditions in the eurozone and the lack of oil demand from the United States, that showed increasing crude oil inventories," Sucden analyst Myrto Sokou told AFP.

"The EIA report was fairly mixed, showing a large unexpected build in crude oil stocks in Cushing but large declines in gasoline and distillate inventories.

"Investors should remain cautious as there is a clear downside momentum in the oil market with WTI crude oil retreating sharply toward $92 per barrel.

"The global macroeconomic outlook remains very gloomy, while oil fundamentals and technical levels verify the bearish market sentiment."

Oil also slid as the dollar gained ground against the European single currency, amid mounting concerns over the eurozone crisis.

The euro struck a four-month low point at $1.2681 on Wednesday on news Greece will go to the polls again after talks to form a coalition failed, stoking fears it will exit the eurozone.

A stronger US currency makes dollar-denominated crude more expensive for buyers using the euro, denting demand for oil and pulling the market lower.

"Oil prices remained under pressure as euro area politics continued to be in focus," Barclays analysts said in a note to clients.

"Speculation that Greece may exit the single currency caused European stocks, peripheral euro area bonds, the euro and commodities to sell off."