Related:World Oil Prices
New York's main contract, light sweet crude for delivery in July, slumped 1.90 dollars to close at 69.86 dollars a barrel.
In London, Brent North Sea crude for July delivery dropped 1.78 dollars to settle at 69.22 dollars a barrel.
U.S. commercial crude oil inventories fell over the past week but gasoline reserves increased, the Energy Department reported Wednesday in its weekly survey.
In the week ending May 19, the country's gasoline reserves rose 2.1 million barrels last week to 208.5 million, or almost 3 percent below last year. The rise in gasoline stocks, which are closely watched as summer driving season starts next week, was more than the increase of 1.3 million barrels that analysts had been expecting.
Commercial crude oil inventories dropped by three million barrels to 343.9 million, or 3.6 percent above levels a year ago. The drop was three times the decline expected by analysts.
Supplies of distillates, which are used to make diesel and heating oil, increased by 2.5 million barrels to 117.1 million, or increased 8 percent more than a year ago. Analysts were predicting a gain of 550,000 barrels.
Traders are still concerned about the possibilities that Iran's oil exports would halt if the United Nations imposes an international sanction on Teheran for its nuclear activities.
The United States will have no direct negotiations with Iran unless it suspends its uranium enrichment program, White House spokesman Tony Snow said on Wednesday.