The losses were said to be a reaction to USA government data showing new orders for us -made goods fell in November, especially for machinery and electrical equipment, as well as Genscape reporting that crude inventories at Cushing, Oklahoma rose by over 943,000 barrels in the week to February 1.
Meanwhile, imports are set to drop further as the USA slapped sanctions on Venezuelan state oil company PDVSA.
Opec's sales to the world's biggest economy fell 22 per cent month-on-month and 37 per cent year on year, to 1.4m barrels per day, data from energy intelligence company Kpler shows.
The potential gusher comes as Venezuela's production plunges amid an economic crisis and US sanctions targeting the country's oil sector.
Output declines from the Organization of the Petroleum Exporting Countries (OPEC) as they make good on their pact to curb a supply overhang were compounded by falling United States oil rig counts and sanctions on Venezuelan oil sales. The government's official supply report is due later on Wednesday.
U.S. West Texas Intermediate (WTI) crude futures fell 70 cents, or 1.27 percent, to settle at $54.56 a barrel.
Another factor behind the oil market rally is the supply cuts imposed by the member-states of the Organization of the Petroleum Exporting Countries (OPEC) and allied oil producers.
When asked about how European and Asian customers could be convinced to buy oil from Venezuela, risking sanctions from Washington, he stated that now, Washington's sanctions apply only to USA entities.
Venezuela's opposition is opening a USA fund to receive the proceeds of oil sales, a key measure to secure revenue for its effort to dislodge Maduro, an opposition lawmaker said on Wednesday.
"The global oil supply/demand balance could shift from a current significant surplus to zero at the end of the year", Pictet Wealth Management analyst Jean-Pierre Durante wrote in a report.
The producers known as OPEC+ started cutting production by 1.2 million barrels per day (bpd) from last month to avert a new supply glut, and OPEC has delivered nearly three-quarters of its pledged cuts already, a Reuters survey showed last week.
The global economic outlook and prospects for growth in fuel demand have been clouded by poor economic data in China and US-China trade tensions. These concerns, in combination with uncertainty in the US-China trade negotiations keep weighing on traders' sentiment. Oil prices fell on Tuesday after a survey showed euro zone business expansion almost stalled in January.
US President Donald Trump last week said he would meet with Chinese President Xi Jinping, perhaps twice, in the coming weeks to try to seal a comprehensive trade deal with Beijing, but acknowledged it was not yet clear whether a deal could be reached.