U.S. oil closed down slightly on Wednesday as concerns of a growing global supply glut offset optimism in recent weeks about declining U.S. production.
Crude futures have lost about 6 percent so far this week, sliding after OPEC reportedly pumped 110,000 barrels per day more in September than in August, and nearly 2 million bpd above forecast demand for 2015.
In comparison, U.S. shale oil production is expected to fall by 93,000 bpd in November, although it would be the largest monthly cut since the U.S. Energy Information Administration (EIA) began compiling shale output data in 2007.
More immediately, U.S. crude stockpiles likely rose by almost 3 million barrels last week, analysts polled by Reuters forecast, as refinery runs declined from autumn maintenance works. The American Petroleum Institute will issue preliminary stockpiles data at 4:30 p.m. (1730 GMT) on Tuesday ahead of official inventory numbers from the EIA on Wednesday.
"We see some renewed selling as this week proceeds," said Jim Ritterbusch of Chicago-based oil markets consultancy, Ritterbusch & Associates.
He particularly cited weakness in the gasoline crack — the profit refiners get for turning crude into gasoline — which he said was weighing on the petroleum complex. The crack has fallen by a third of its value, or nearly $4 a barrel, over the past two weeks.
Weaker oil demand from No. 2 global economy, China, was also hurting crude prices. China's growth for the third quarter is expected to fall below 7 percent for the first time since the global financial crisis.
OPEC trimmed its estimate of 2016 world oil demand growth by 40,000 bpd to 1.25 million bpd, citing slower growth inChina.
The International Energy Agency, an energy watchdog for the West, said on Tuesday the oil market would remain oversupplied in 2016.
"Despite the progress made in stimulating demand and discouraging non-OPEC supply, oil producers will face another year of severe pain if Iranian sanctions are lifted early next year and other OPEC members do not make way," said David Hufton at London-based oil broker PVM.