New York's main contract, West Texas Intermediate for delivery in November, was down 36 cents at USD 102.30 in mid-morning trade, while Brent North Sea crude for November eased 24 cents to USD 108.08.
The US Energy Information Administration (EIA) on Wednesday said that US crude reserves soared 2.6 million barrels in the week ending September 20. Analysts on average had expected a drop of 900,000.
"The surge in US crude inventories was not expected at all, and it has dampened oil prices along with the removal of the risk premium surrounding Syria," Desmond Chua, market analyst at CMC Markets in Singapore, said.
Prices were also under pressure following fresh signs of thawing US-Iran relations, which could possibly lead to an easing of Western sanctions on the crude producer, allowing it to export oil more freely.
Iran's economy has been crippled by a series of UN and US sanctions aimed at bringing an end to its nuclear programme, which the West claims is being used to develop nuclear weapons. Iran denies the assertion.
US Secretary of State John Kerry and Iranian counterpart Mohammad Javad Zarif will hold talks on Thursday on Tehran's nuclear programme, the highest level meeting between since the Islamic Republic's 1979 revolution.


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