USA sanctions on Iran - set to go into full effect next week - and a bounce in stock markets from recent losses also underpinned crude futures.
The United States Oil ETF (NYSEARCA: USO) traded up about 0.3%, at $14.07 in a 52-week range of $10.82 to $16.24.
Now, with US sanctions prohibiting the purchase of Iranian oil by non-exempt countries and organisations set to come into effect on November 04, and with a series of headwinds set to confront the global economy in 2019, the outlook for prices is ambiguous at best. "What this means in the near-term is that the US may double production, double export capacity and introduce new market innovations", Fannon said.
Downward pressure on oil is also visible in the physical market, where Saudi Arabia is expected to cut December crude prices amid higher supply and a glut in refined products that has eroded refinery profits.
The supply surge is increasingly finding a home overseas, as US refiners reach the maximum they can handle of the light, low-sulfur oil coming from shale plays.
A report released by the American Petroleum Institute on Tuesday showed us crude supplies rose by 5.7 million barrels last week, more than analyst forecasts for a 4.1 million-barrel build.
US crude oil production has increased significantly during the past ten years, driven mainly by production from tight oil formations using horizontal drilling and hydraulic fracturing.
U.S. West Texas Intermediate crude dropped 10.8 percent in October, its steepest decline since July 2016.
One might expect the market to be nervous ahead of the impending U.S. sanctions on Iran, but the oil price dipped this week.
Both benchmarks posted their biggest monthly percentage decline since July 2016 in October, with Brent down 8.8 per cent for the month and US crude losing almost 11 per cent.
European and USA stocks recorded 1 per cent gains in early trade. Iran's oil exports fell by about a third in the five months to September, tumbling by about 800,000 barrels per day (bpd), according to CNBC. Also weighing on the outlook for oil are fears of a slowdown in global, growth, particularly in emerging markets, which would likely mean weaker demand for the valuable commodity.
Rising crude oil production is being partially offset by low refinery utilization.
Brent and US futures have dropped on growing concern over a possible slowdown in global growth as the U.S-China trade dispute remains unresolved, and is starting to hit emerging market economies in particular.
Data from Russia's energy ministry this week said the country's oil production was at a 30-year high, producing 11.41 million barrels a day in October.