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US crude fell $1 a barrel to $80.84 after posting its largest fall in a single session in nearly two years on Tuesday
Core members of the Organization of the Petroleum Exporting Countries appear to be focused on fighting for market share rather than on cutting production to shore up prices.
Weak European markets and slowing Chinese inflation added to concerns about global growth, which helped extend the rout.
“The global environment is bearish,” said market analyst Olivier Jakob of Petromatrix. “There’s broad acceptance by the market that Saudi Arabia is willing to let prices go lower. With the velocity of the drop, definitely you’ve got people liquidating positions.”
Brent for November touched a low of $83.37, down $1.67, before recovering to $83.90 by 1120 GMT. Brent has now fallen more than 25% from the year’s mid-June peak.
U.S. crude fell $1.30 a barrel to $80.54 after posting its largest fall in a single session in nearly two years on Tuesday. It went down to $80.37 on Wednesday, a 27-month low.
Dealers said technical selling was coming into play, with Wall Street banks scrambling to neutralise exposure to big oil option trades, but the main pressure came from burgeoning global oversupply.
“For as long as OPEC makes no move to tackle this threat of a massive oversupply by reducing production, prices are likely to continue to fall,” Commerzbank said in a report. “OPEC producers cannot hope for any reduction in shale oil production in the U.S. in the near future.”
Data from the United States suggests no eminent slowing of the boom in shale oil production.
U.S. shale oil production is set to grow by around 106,000 barrels per day in November from October, the U.S. Energy Information Administration said.
On Tuesday, Iran said it could live with lower oil prices, joining the chorus of similar signals from core OPEC members Saudi Arabia and Kuwait.
