Oil prices stabilized on Thursday, bouncing back from an early sell-off after Asian and European stock markets plunged in the wake of Wall Street's biggest daily decline since 2011.
Brent crude oil fell 82 cents, or 1.1 percent, to a low of $75.35 a barrel before rallying to around $76.94, up 77 cents. The global benchmark has lost more than $10 a barrel since hitting a high of $86.74 on Oct. 3.
U.S. light crude settled up 51 cents, or 0.8 percent at $67.33 after touching an intraday low of $65.99. The turnaround followed a rebound in U.S. stocks, with the three major indexes surging more than 1 percent each.
City Index market analyst Fiona Cincotta said factors outside the oil market were now leading sentiment.
"Fear and anxiety about the global economy are currently playing a bigger role in the oil price than the actual fundamentals of supply and demand," Cincotta said.
Financial markets have been hit hard by a range of worries, including the U.S.-China trade war, a rout in emerging market currencies, rising borrowing costs and bond yields, as well as economic concerns in Italy.
Weakness is also starting to show in container and dry-bulk rates, both of which have declined significantly in October, pointing to a slowdown in global trade.
Many investors are concerned about rising oil inventories as supply exceeds demand in some key markets, including the United States. U.S. crude oil production has risen steadily over the past decade and hit a record high of 11.2 million barrels per day (bpd) this month.
U.S. commercial crude stocks rose for a fifth consecutive week last week, increasing 6.3 million barrels to 422.79 million barrels, the Energy Information Administration said.
Saudi Arabia's OPEC governor said on Thursday the oil market could face oversupply in the fourth quarter.
"The market in the fourth quarter could be shifting towards an oversupply situation as evidenced by rising inventories over the past few weeks," Adeeb Al-Aama told Reuters.
Saudi Energy Minister Khalid Al-Falih said on Thursday that there could be a need for intervention to reduce oil stockpiles after increases in recent months.
Investors will also be paying close attention to U.S. sanctions on Iranian crude exports, due to kick in from Nov. 4.
Bowing to pressure from Washington, Chinese oil majors Sinopec and China National Petroleum Corp (CNPC) have yet to buy any oil from Iran for November because of concerns that sanctions violations could hurt their operations.
China has been Iran's biggest oil customer.WATCH: Here's what drives the price of oil