Oil prices fell more than 4 percent on Tuesday, pressured by stock market weakness and vows by top oil exporter Saudi Arabia to meet the demands of the world's oil consumers.
U.S. light crude ended Tuesday's session down $2.93, or 4.2 percent, to $66.43 a barrel, after earlier hitting a two-month low at $65.74. The contract posted its biggest daily loss since July 11, when it fell 5 percent, and settled below its 200-day moving average for the first time in more than a year.
International benchmark Brent crude fell by $3.70 a barrel, down 4.6 percent, to $76.13 by 2:28 p.m. ET. The contract earlier touched $75.88, its lowest level since Sept. 7.
The "correlation between oil prices and broader market trading is a driving factor and the volatility in both is enough of a reason to take some money off the table," said Tamar Essner, director of energy and utilities at Nasdaq Corporate Solutions.
Traders have been trimming bets that oil prices will rise in recent weeks, a sign the market is reducing its exposure to risk and taking profits after a runup in oil prices, Essner said.
U.S. crude and Brent have both fallen by about $10 from their nearly four-year closing highs on Oct. 3.
The prospect of weaker-than-expected economic growth has already led some forecasters to trim their expectations for oil demand. This month, OPEC and the International Energy Agency both knocked down their projections for growth in global oil consumption.
Crude futures were already under pressure on Tuesday after Saudi Arabia's energy minister sought for a second straight day to assure markets that the kingdom will keep the world adequately supplied with crude.
The killing of journalist and U.S. resident Jamal Khashoggi by Saudi agents has stirred calls for U.S. sanctions on the kingdom. Saudi Arabia said last week it would retaliate against any punishment for the killing.
However, Saudi Energy Minister Khalid al-Falih said on Monday the country has no intention of cutting back oil supply. On Tuesday, he said Saudi Arabia still intends to increase production to meet demand as U.S. sanctions shrink Iran's crude exports.
The sanctions on Iranian crude go into full effect on Nov. 4. Washington is largely depending on Saudi Arabia to fill the gap left by the loss of the Iranian barrels.
The American Petroleum Institute is scheduled to release data on U.S. crude stockpiles on Tuesday afternoon, followed by a more comprehensive report by the U.S. Department of Energy on Wednesday.
U.S. crude inventories have risen by more than 22 million barrels over the last four weeks, the biggest increase since 2015, when the oil market was heavily oversupplied.
"The weekly inventory data is unlikely to provide any respite, with a fifth consecutive build expected to U.S. oil inventories," said Matt Smith, director of commodity research at ClipperData.