Russian Federation is pumping oil at a post-Soviet high, US crude output has topped 11 million barrels a day and a Reuters survey of OPEC production shows the group more than made up for any declines in Iranian shipments in October.
"There are two downward pressures on global oil demand growth".
Imports of Iranian crude oil by major buyers in Asia hit a 32-month low in September, as China, South Korea and Japan sharply cut their purchases ahead of the sanctions on Tehran, government and ship-tracking data showed. "China trade war, monetary policy tightening, fears of a hard Brexit (and) Italy's budget woes" as main reasons for the selloffs.
Both crude benchmarks have fallen about US$10 a barrel from four-year highs reached in the first week of October and were on track to post their worst monthly performance since July 2016. U.S. crude oil inventories rose by 3.2 mln bbl in the week ended Oct 26, the Energy Information Administration said in its report.
Brent crude LCOc1 futures dropped $1.76 to $75.58 a barrel, a 2.3 percent decline, by 1:15 p.m. EDT (1715 GMT).
Concerns over the US-China trade dispute, prospects of lower demand for crude oil in the next months and renewed jitters regarding potential oversupply in the markets have been weighing on traders' sentiment as of late.
Investors will look to official government data on USA inventories due on Wednesday.
New U.S. sanctions on Iran begin on November 4 and Washington has made it clear to Tehran's customers that it expects them to stop buying any Iranian crude oil from that date. Now trade is carried out by the exchange's two divisions, the NYMEX Division and the COMEX Division, the first one designed for trades of oil, gas, platinum, palladium, ethanol, coal, electricity and carbon dioxide emissions, the second one for gold, silver, copper and aluminum.
A list of all countries getting US waivers allowing them to import Iranian oil is expected to be released officially on Monday, industry sources say.
The string of builds weighed heavily on prices, which were already depressed after IEA warned on Tuesday that the longer trend of higher oil prices would start to dent demand in key oil consuming markets such as India and Indonesia.
Uncertainty related to how much of Iran's production of 3.8 million barrels per day, as of April 2018, would be unable to reach the markets had caused increases in crude oil prices.