By Richard Valdmanis
Oil prices have already been under heavy selling pressure since hitting a record $100 in early January amid intensifying signs the economy of the world's biggest energy consumer is falling into recession.
U.S. crude fell $1.27 to $87.14 a barrel, adding to losses of nearly 2 percent the previous session. London Brent crude dropped $1.04 to $87.78.
Gasoline supplies, meanwhile, climbed 3.6 million barrels to their highest level since February 1994, the EIA said.
On Tuesday, an influential report showed the vast U.S. services sector contracted to recessionary levels in January, reinforcing fears energy demand will slow down under the weight of high prices and the fallout from a housing slump.
The Organization of the Petroleum Exporting Countries could keep output at current levels when its ministers meet next month if there is no change in the market, Secretary-General Abdullah al-Badri said on Tuesday.
(Additional reporting by Randy Fabi in London, Fayen Wong in Sydney; Editing by David Gregorio)
