OPEC's disclosure that its members boosted production by 106,000 barrels a day in May also pressured prices. Some experts feel the world already has an ample supply to meet current demand.
Benchmark oil for July delivery fell 39 cents to close at $95.38 per barrel on the New York Mercantile Exchange. Crude fell to $94.04 earlier in the day.
The Bank of Japan opted to stick to its current bond-buying program Tuesday, disappointing some investors' hopes for new measures to help the world's third-largest economy.
Addison Armstrong, senior director of market research at Tradition Energy in Washington, said the BOJ's decision increased concerns "that global central banks will soon begin to pull back on stimulus measures."
Investors have been trying to guess the timetable for the U.S. Federal Reserve to wind down its massive bond-buying program. The $85 billion-a-month asset purchases have helped keep interest rates at historic lows, prompting investors to turn to stocks and commodities in search of returns that outdo bonds.
In the U.S., the Dow Jones industrial average was down 48 points, 0.2 percent, to 15,191 in afternoon trading after a day of broad swings up and down. Most markets in Europe fell more than 1 percent. Japan stocks lost 1.5 percent.
The Energy Department had good news for U.S. consumers in its latest outlook on the energy markets. The price of gasoline, which has averaged $3.58 a gallon so far this year, is expected to average $3.40 a gallon in the second half. Last year, gasoline averaged $3.59 a gallon from July through December.
The Energy Department also said milder temperatures this summer should lower the average residential electric bill by $10 to an average of $395 for June through August.
Elsewhere Brent crude, a benchmark for many international oil varieties, fell 94 cents to finish at $102.97 a barrel on the ICE Futures exchange in London.
In other energy futures trading on the Nymex:
— Wholesale gasoline fell 3 cents to end at $2.82 a gallon.
— Heating oil fell 3 cents to finish at $2.86 per gallon.
— Natural gas dropped 8 cents to end at $3.72 per 1,000 cubic feet.