Oil prices dropped well below US$76 a barrel on Wednesday amid rising gasolene inventories in the United States and prospects of a slowdown in crude demand from European refiners due to weak profit margins.

London Brent crude, seen as the best indicator of the global market, settled down 96 cents at US$75.44 a barrel after hitting an 11-month high of US$76.63 on Tuesday.

United States crude was down 25 cents at US$72.56.

The losses came after weekly data from the U.S. Energy Information Administration showed a 1.2-million-barrel increase in commercial gasolene inventories, beating analyst expectations of a 900,000 barrel build.

Crude stocks in the world's top energy consumer, meanwhile, slipped 1.4 million barrels, compared to a predicted rise of 100,000 barrels.

Energy analysts have said speculative and institutional money pouring into crude oil futures is a major factor in Brent's rise of more than $6 since late July and in U.S. crude's advance towards US$73.

"With speculative funds having close to record long positions, volatility is ahead as WTI (U.S. crude) is clearly in their hands," said Olivier Jakob, of oil consultancy Petromatrix.

Reuters