U.S. WTI crude closed at a three-year low on Wednesday with prices under pressure from the growing oil glut created by the U.S. shale boom and the restart of Libya's largest operational oilfield.
With oil prices down 30 percent since June, delegates in the Organization of the Petroleum Exporting Countries (OPEC) are starting to suggest they may push for an informal output cut of around 500,000 barrels per day (bpd) when the producer group meets in Vienna on Nov. 27.
But they have warned an agreement within OPEC will not be easy, and many oil traders and analysts doubt members will take a decisive stance as they compete to hold onto market share.
Brent for December delivery fell $1.50 to $80.18 per barrel. It dipped below $80 earlier for the first time since 2010.
U.S. crude settled 76 cents lower at $77.18 per barrel, its lowest close since October 2011.
Saudi Arabia, the world's largest exporter, said it was doing its best with other producers to ensure price stability.
``Talk of a price war is a sign of misunderstanding, deliberate or otherwise, and has no basis in reality,'' Saudi Oil Minister Ali al-Naimi said during a visit to Mexico on Wednesday.
The country also said its oil production was little changed in October in OPEC's monthly report on Wednesday, even as the group forecast demand for its oil next year will drop to 29.2 million bpd - almost 1 million less than it is currently producing.
"The consensus view is OPEC won't take any action, or if it does, not big enough or sufficiently definitive to have too much impact on prices," said Ric Spooner, chief market analyst at Sydney's CMC Markets.
Commerzbank analyst Carsten Fritsch said an unofficial 500,000-bpd cut by OPEC would be "by no means enough to restore any sort of balance" to the oil market.
"Evidently the market is keen to test out OPEC's pain threshold," Fritsch said.
Adding to supply, Libya restarted production at its large El Sharara oilfield, a spokesman for National Oil Corp (NOC) said, though exports remained blocked from the 120,000-bpd Hariga port by protesters involved in a wage dispute. The smaller El Feel field is also shut.
The oil minister of Iran, one of the OPEC members hardest hit by lower prices, on Tuesday met Kuwait's emir as part of a tour aimed at winning support to stabilise oil markets. Kuwait's oil minister has said a cut is unlikely.
U.S. oil inventory data due on Wednesday and Thursday could show a build in crude stocks of 800,000 barrels in the week ended Nov. 7, according to a Reuters poll of analysts. The data has been delayed for a day by a federal holiday.