The price of oil slipped 1 percent Tuesday as investors prepared for an expected reduction in the U.S. Federal Reserve's monetary stimulus.
Meanwhile, pump prices are now down 8 cents in September after the nationwide average for gasoline fell to $3.51 a gallon.
Benchmark oil for October delivery fell $1.17, or 1.1 percent, to close at $105.42 on the New York Mercantile Exchange. Oil fell $1.62 on Monday.
The central bank has been buying financial assets, such as bonds, in an attempt to push down interest rates and make loans more easily available. Global stocks and commodities surged as the new money generated by the program — currently running at $85 billion a month — flowed through the financial system.
But recent data have shown the U.S. economy is in better shape, which may convince Fed members that it is time to wind down the stimulus — so-called tapering — at the end of a two-day policy meeting on Wednesday.
Developments in Syria and Libya also put downward pressure on oil prices. Negotiations between Russia and the U.S. on Syria's chemical weapons have removed the threat of an imminent U.S. military strike. And reports have signaled the return of more Libyan crude oil to the market, after a slowdown in production and exports.
Investors will also be monitoring fresh information on U.S. stockpiles of crude and refined products.
Energy Department data for the week ending Sept. 6 are expected to show a decline of 1.5 million barrels in crude oil stocks, while gasoline stocks are expected to remain unchanged, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.