Brent crude oil was trading around $77.61 a barrel, up 72 cents, by 2:29 p.m. ET, after earlier falling more than $1 to a low of $75.77.
In equity markets, the S&P 500 Index is set for the worst monthly decline since 2011 on concerns over global economic growth and sluggish corporate earnings. Not only did you have Saudi Arabia backtrack from their "pump all you can" policy, you also had great earnings from energy companies and as of right now that does not even matter.
This falls in line with comments made last month by Khalid al-Falih, energy minister of Saudi Arabia: he said that while his kingdom and other OPEC members are now pumping full-out to compensate for the shortcomings expected as a results of the USA sanctions against Iran, "We expect an oversupply in 2019, [and] we may have to go back to the reduction".
Data released by the U.S. Energy Information Administration on Wednesday showed crude oil inventories in the U.S. rose for the fifth successive week, as stockpiles rose by 6.35 million barrels in the week to October 19, exceeding analysts' forecasts by a significant margin.
An equities rout in the United States late Wednesday is seeing crude oil take a step lower as energies traders reduce their oil exposure over concerns that a continued equities slide will see oil demand head further south.
The market for months has weighed concern surrounding potential supply shortages from US sanctions on Iran, due to come into force November 4.More news: 9 wild details from the Dodgers' insane, 18-inning Game 3 win
The great fear of a shortage of global crude is subsiding as Saudi Arabia warned this week that we're in danger of having to manage a surplus.
However, last May U.S. President Donald Trump announced the withdrawal of his country from the JCPOA, under the assumption that Iran secretly develops a nuclear program. The move comes as Saudi Arabia, seeking to damp a foreign-relations crisis, said this month that it would increase oil supply, pushing down prices and giving traders further options outside Iran. Yet, while oil companies are finally starting to prosper, the sharp crude oil price drop may cause many to rein in spending plans.
Financial markets have been hit hard by a range of worries, including the U.S. China's largest oil refiners, China National Petroleum Corp. and China Petrochemical Corp., haven't booked any Iranian cargo for November, according to people familiar with the matter. Still, doubts remain over whether OPEC is willing - and able - to replace supply losses when sanctions on Iran officially start in just over a week.
US light crude was up 40 cents at $67.22 after touching an intraday low of $65.99, down 83 cents.
US crude production is soaring, boosted by technological advances. A couple of years ago, such a rise might have been short-lived as shale producers accelerated operations and added more oil to the global market.