Oil prices extended losses in post-settlement trade when industry group the American Petroleum Institute reported that crude inventories rose by 9.7 million barrels in the week to 5 October to 410.7 million, more than four times the 2.6 million barrel build analysts had expected.
USA crude futures CLc1 were trading down over 1 percent at $74.14 per barrel Wednesday morning, reflecting the declining importance of Gulf of Mexico output that has resulted from the growth of production from the nation's onshore shale fields.
West Texas Intermediate for November delivery declined as much as $1.54 to $71.63 a barrel on the New York Mercantile Exchange, and was at $72.48 at 8:57 a.m. local time.
As Wednesday saw crude prices drop dramatically due to sudden concerns about oversupply and waning demand, it was unsurprising that some experts would warn of "extreme volatility" for prices due to the US sanctions against Iran.
On the oil front, United States crude inventories rose by 6 million barrels last week, the Energy Information Administration said, more than double analysts' expectations of a 2.6 million-barrel increase.
Iranian Oil Minister Bijan Zanganeh on Monday described a Saudi claim that the kingdom could replace Iran's crude exports as "nonsense".
The price of WTI crude oil futures are settling the day at $74.96, up $0.67 or 0.9% on the day.
Companies turned off daily production of about 670,800 barrels of oil and 726 million cubic feet of natural gas by midday on Tuesday, according to offshore regulator the Bureau of Safety and Environmental Enforcement.
"The up-trend is over for the moment, and a new direction is settling in", said Robin Bieber, technical chart analyst at London brokerage PVM Oil.
The landmark nuclear deal, signed during the Barack Obama regime, was concluded between Iran and six world powers which include, U.S., Russia, U.K., China, France, and Germany, that lifted sanctions on Iran but place strict limits on its nuclear program for 12 years. Supply worries also eased as Hurricane Michael likely spared oil assets from significant damage as it smashed into Florida, even as it caused at least one death, injuries and widespread destruction.
Crude futures steadied late in the session on Friday, following the stock market slightly higher after earlier swinging lower on a weakening oil demand outlook. US light crude CLc1 was down 15 cents at $74.81.
The global benchmark posted a 1.3 percent gain on Tuesday. However, Gulf production cuts have been less of an impact on supplies with the rise of US shale oil.