At 11:25 am (0325 GMT), New York's main contract, light sweet crude for March delivery was down four cents to 52.54 dollars a barrel from 52.58 dollars in late US deals Monday. The February contract expired at 51.13 dollars.

Brent North Sea crude for March was at 54.64 dollars, down six cents.

"In the short-term ... inventories are high and they are going to stay high even with the cold weather," said Tony Nunan, who manages energy risk for Mitsubishi Corp in Tokyo.

"The market outlook is bearish in the short-term and crude inventories will continue to build."

The US cold snap, which saw snow blanket parts of the northeast after weeks of mild temperatures, was expected to raise demand for heating fuel.

That explained an earlier rally in prices but the market remained convinced that the United States has plentiful reserves of petroleum products.

The US Department of Energy said crude oil reserves in the world's biggest energy consumer rose 6.8 million barrels to 321.5 million in the week ended January 12.

Levels of distillate products, such as heating oil and diesel fuel, increased 900,000 barrels to 141.9 million over the week.

In the long-term, however, "we still face a very dangerous world," said Nunan, suggesting that prices will remain under pressure from geopolitical risks.

While prices had fallen below 50 dollars a barrel in intra-day trading last week, they still settled above the 50-dollar threshold.