The IEA left its forecast for global demand growth for 2018 and 2019 unchanged from last month at 1.3 million barrels per day (bpd) and 1.4 million bpd, respectively, but cut its forecast for non-OECD demand growth, the engine of expansion in world oil consumption.
"This tweet certainly did not help prices", said Warren Patterson, a senior commodities strategist at ING Bank NV.
But when President Donald Trump imposed sanctions November 5, he issued six-month waivers for some of Iran's biggest oil customers. The American Petroleum Institute said late on Wednesday that crude inventories rose by 8.8 million barrels in the week to November 9 to 440.7 million, compared with analyst expectations for an increase of 3.2 million barrels.
West Texas Intermediate for December delivery traded at $56.23 a barrel on the New York Mercantile Exchange, down 2 cents, at 16:41 in Tokyo.
Oil's unprecedented decline deepened as investors fled a market hammered by swelling excess supplies, a darkening demand outlook and U.S. President Donald Trump's Twitter critique of the world's biggest crude exporter. The contract gained 65 cents to $66.12 on Wednesday.
Global benchmark Brent crude oil futures were down 9 cents at $65.38 per barrel. The global benchmark crude traded at a $10.16 premium to WTI for the same month.
A closely watched meeting between the Organization of Petroleum Exporting Countries and its allies including Russian Federation on Sunday yielded no formal change in output policy, but delegates warned they may need "new strategies".More news: Real Madrid appoint Santiago Solari as permanent manager
Yawger noted that the potential pullback in Saudi output has in part already been made up by the sharp bump in US production, which reached 11.6 million bpd in the most recent week, a new record.
In its latest monthly oil market report published on Wednesday, the International Energy Agency (IEA) slashed the demand forecasts for the OPEC crude oil for 2019.
A new round of OPEC-led supply cuts in 2019 would further support USA shale oil production, potentially repeating the cycle that played out in 2014.
The sources, who declined to be identified by name as the talks are confidential, said a cut of up to 1.4 million bpd was one option discussed by energy ministers from Saudi Arabia, non-OPEC Russia and other nations in Abu Dhabi on Sunday.
Once the oil industry's star product, gasoline is now losing oil refineries money in Europe and has plunged in value against diesel, its main competitor.
In its report released yesterday, OPEC stated: "In 2018, oil demand growth is anticipated to increase by 1.50 mb/d y-o-y, a downward revision from the previous month of 40 tb/d, mainly due to weaker-than-expected oil demand data from the Middle East and, to a lesser extent, China during 3Q18". The surge in U.S. production is contributing to rising stockpiles. Analysts predict a rise of 3.2 million barrels, according to a Bloomberg survey.