Brent crude oil slipped to a one-month low below $56 a barrel on Wednesday before steadying as a rally in the US dollar and global oversupply weighed.

The dollar hit a fresh 12-year high against the euro, gaining more than 1 per cent to trade at $1.0561 against the single currency. The dollar index has rallied by 25 per cent since last May, making commodities priced in the greenback more expensive for holders of other currencies.

Russia's crude oil exports are also set to rise this year, Energy Minister Alexander Novak said, despite some expectations of a plunge in production due to lower prices following the crash from above $100 a barrel last year.

"We expect more downward pressure today," said Phillip Futures oil analyst Daniel Ang in Singapore, after Brent fell more than 3 per cent on Tuesday.

Brent for April delivery hit a one-month low of $55.92 a barrel before recovering to trade unchanged on the day at $56.39 by 1126 GMT. It dropped $2.14, or 3.66 per cent, in the previous session.

West Texas Intermediate for April delivery climbed 24 cents to $48.53 a barrel, after falling $1.71, or 3.42 per cent, on Tuesday. Its discount to Brent was at $7.86 a barrel, close to its narrowest in a month.

The US crude benchmark took some support from a surprise drop in crude stocks in the world's largest oil consumer last week, with the American Petroleum Institute reporting a 404,000-barrel fall late on Tuesday. Analysts had expected a 4.4-million-barrel build.

Despite the draw, crude stocks rose by 2.2 million barrels at the Cushing, Oklahoma delivery point of the WTI contract, the API said, keeping price gains in check.

Traders are now waiting for official data from the US Energy Information Administration to see whether it confirms the API numbers. - Reuters