The American Petroleum Institute (API) on Tuesday reported a buildup of 9.88 million barrels in the US crude oil inventories for the week ending October 19.
"While geopolitical factors raise the risk that Saudi Arabia backtracks on its supply commitments to offset Iranian sanctions, we do not expect production cuts given the resulting loss of market share to U.S. shale and other oil producers", JP Morgan said in a note on Monday, as carried by CNBC.
However, yesterday, oil prices fell almost 3 percent to more than one-month lows after Saudi Arabia said it could supply more crude quickly if needed, easing concerns ahead of USA sanctions on Iran and as US equity markets sold off.
Brent crude oil has lost about $10 a barrel since hitting a high of $86.74 on October 3, on signs of ample supplies.
One of the biggest concerns for the oil market is demand.
Benchmark Brent crude oil hit an intraday low of $78.32 a barrel, down $1.51, following Falih's comments.
Other OPEC members, meanwhile, had added only 105,000 barrels per day of extra oil in total during the period, which means they are not capable of producing more than current levels, he said.
"We think that demand will start dropping off as we approach year-end in accordance with regular seasonal patterns", he said at a meeting in Vienna, according to Reuters.
After the murder of a Saudi journalist Jamal Khashoggi on the market there are fears that the Kingdom might cut oil supplies in response to possible sanctions from the United States, said Davydov. There have been reports that companies in different parts of the world would defy sanctions and continue buying Iranian oil.
Prices had slumped as forecasters including Opec and the International Energy Agency predicted slower oil-demand growth for 2019. However, the effects of the USA withdrawal from the Joint Comprehensive Plan of Action (JCPOA), the re-imposition of sanctions on Iran, and the potential response from members of the Organization of the Petroleum Exporting Countries (OPEC) and other countries pose significant uncertainty to the forecast. During the same quarter, Iran's crude oil output dropped 5.73 per cent to 3,599 thousand barrels per day. The stocks jumped to more than 9 million barrels.
City Index market analyst Fiona Cincotta said factors outside the oil market were now leading sentiment.
South Korea's crude imports from Iran fell to zero in September, data from state-run Korea National Oil Corp showed.
Google makes it easier to clear your recent Search activity
You can now quickly erase this history from Google's search results rather than heading to the Google Account dashboard . Lawsuits aside, both Google and Facebook executives have also lent their support to a Federal privacy law in the past.