Brent oil prices sank back under $100 per barrel as the US Federal Reserve's minutes from last month's key policy meeting showed no definite action plan or timeline for further stimulus measures.
Brent North Sea crude for delivery in August slid $1.26 to $98.97 per barrel in early afternoon deals in London.
New York's main contract, light sweet crude for August, dived $1.23 to $84.58.
Traders were on the back foot after minutes from the most recent US Federal Reserve June meeting suggested overnight that officials were split on further stimulus measures to aid the American economy.
Concerns about additional quantitative easing (QE) for the US economy came to the fore on Wednesday following the release of the minutes of the June 19-20 Federal Open Market Committee meeting (FOMC).
Several top policymakers urged the central bank to look at new tools to bolster the financial system amid a weak recovery, but the minutes also showed the Fed split on how, when and if to provide more stimulus.
“With the FOMC minutes offering a more cautious outlook on the economic environment and a distinct lack of guidance on further, aggressive policy action, crude oil prices are coming under pressure today,” said Sucden analyst Jack Pollard.
The crude market was also weighed down by demand concerns linked to the weak state of the global economy, dealers said.
Analysts remain divided about the long-term prospects for the oil market after major industry groups differed in their demand growth forecasts for the coming year.
The International Energy Agency forecast Thursday that oil demand growth would grow by 1 million barrels a day next year, in the grouping's latest monthly market report.
That was a more optimistic stance than the Organization of Petroleum Exporting Countries, which said earlier this week that it expected a modest growth of 0.8 million barrels per day in 2013.
The oil market also fell Thursday on the back of the strong greenback, which makes dollar-priced crude more expensive for buyers using weaker currencies. In turn, that tends to dent demand and price levels.
The euro hit fresh two-year lows under $1.22 on Thursday as Spanish austerity measures failed to alleviate eurozone debt crisis fears and as the Fed seemed unlikely to announce any new stimulus measures. The euro dived to $1.2170, the lowest level since June 30, 2010. - Sapa-AFP