Oil posted the biggest decline in two months after US government data showed expanding crude stockpiles.
Oil exports dropped last week and crude production fell to 10.9 MMbpd, showing the impact of limited production in the U.S. Gulf of Mexico due to Hurricane Michael.
That build in reported USA oil stocks, by the Energy Information Administration (EIA), came as a surprise following reports of a draw, by the American Petroleum Institute (API).
"The focus within the oil trade during the next couple of weeks is likely to be on Iran and Saudi Arabia", Jim Ritterbusch, president of Ritterbusch and Associates, said in a note. But WTI prices could fall in the back half of the week, weighed by an increase in USA crude inventories, the note said. U.S.
MRPL, which has an annual deal to buy 4.5 million tonnes of Iranian oil, has so far taken about 60-70 percent of its contracted volumes, Venkatesh said.
The EIA data has showed that oil stockpiles have increased last week despite a drop in production due to hurricane Michael. The new round of US sanctions against Tehran are set to start in November 4.
Saudi Arabia has committed to conducting a complete investigation into the disappearance, U.S. Secretary of State Mike Pompeo said before departing the kingdom for Turkey.
His comments come amid signs that Iran is scrambling to try to maintain its oil exports, which are declining so fast that the International Monetary Fund last week estimated they had already driven Iran's oil-fueled economy into recession.
"The market is reacting to the unexpected decline as inventories tend to rise at this time of year", said Tomomichi Akuta, senior economist at Mitsubishi UFJ Research and Consulting in Tokyo.
The latest vessel-tracking and port data compiled by Refinitiv showed that exports from the Middle East reached a three-month high of 133.08 million barrels in the week to October 14.
While there are many factors that could influence global oil prices, Saudi Arabia and other major producers will continue to act to cushion the market from oil price shocks, Falih said at the India Energy Forum here.