US crude fell by $1.56 to stand at $88.65 a barrel this morning as the dollar strengthened.

US crude stockpiles fell by a larger-than-expected 5.1 million barrels last week as Tropical Storm Lee disrupted output, but declining inventories offered no relief to investors as the euro debt crisis continues, reports Reuters.

Tightening oil supplies also led to Brent crude falling by 58¢ to $111.31 a barrel.