U.S. crude oil price fell Wednesday on spiked domestic supplies, despite the Iran tension.

The U.S. Energy Information Administration said that crude inventories rose sharply by 4.2 million barrels in the week ended January 27 to the highest level in three months. And the gasoline stocks also added 3.0 million barrels in the week. The watchdog said the demand was extremely weak, with weekly gasoline demand down 7.3 percent year-on-year to the lowest level since the recovery.

Meanwhile, European debt problems kept weighing on crude prices as investors worried about economic growth of the currency union.

But the Iran tension offered a lift to crude prices and pushed Brent crude higher. Now Iran faced intensified pressure coming from the United States and Europe and its oil supplies were in larger risk.

On the economic front, China's factory output expanded modestly in January, with the index edging up to 50.5 from 50.3 in December, beating estimates and giving positive signs to the oil market.

Light, sweet crude for March delivery slipped 87 cents, or 0.88 percent to settle at 97.61 dollars a barrel on the New York Mercantile Exchange. In London, Brent crude for March delivery edged up 58 cents, or 0.52 percent to close at 111.56 dollars a barrel.