October ICE Brent crude settled 20 cents/b lower at $72.61/b, while the September NYMEX WTI crude settled 43 cents/b lower at $67.20/b.
Oil prices dipped on Monday as rising trade tensions and economic woes in emerging markets dented the outlook for fuel demand growth, but US sanctions against Iran still pointed towards tighter supply.
The West Texas Intermediate (WTI) for September delivery decreased 43 USA cents to settle at 67.20 dollars a barrel on the New York Mercantile Exchange, while Brent crude for October delivery decreased 20 cents to close at 72.61 dollars a barrel on the London ICE Futures Exchange.
Oil fell as Turkey's economic strife sparked an emerging-market sell-off, fuelling fears of broader market turmoil.
U.S. oil output from seven major shale basins is expected to rise 93,000 bpd in September to 7.52 million bpd, the U.S. Energy Information Administration said on Monday.
U.S. and Brent crude are under pressure early Thursday as investors continue to react to the bearish API data, talk of lower demand and the strengthening U.S. Dollar.
Meanwhile, investors are watching the impact of USA sanctions on Tehran, which analysts say could remove as much as 1 million bpd of Iranian crude from the market by next year.
There are lots of variables in the oil market, the most important of which is Iran, said Tamas Varga, analyst at London brokerage PVM Oil Associates.
In their move to squeeze Tehran, U.S. officials have argued that global oil supplies are robust enough to replace lost Iranian output.
"The high crude prices appear to have been taking a toll on demand", said Sukrit Vijayakar, Director of Indian oil consultancy Trifecta.
Oil futures fell more than $1 a barrel on Wednesday, pressured by a weaker global economic growth outlook and a report of rising US crude inventories even as Washington's sanctions on Iran looked likely to curb that country's crude supplies.
Hedge funds and other money managers cut their bullish positions on U.S. crude to the lowest level since June, data showed on Friday.
Brent crude has fallen back to about $72 a barrel as the questions over demand have offset concerns over supply disruptions, such as United States sanctions on Iran, which had helped to propel the global oil benchmark to highs of $80 a barrel in May. Iran is OPEC's third-largest oil producer - behind Saudi Arabia and Iraq - and now pumps around 3.65 million barrels per day, according to Reuters data.
Iran's oil exports peaked at nearly 3 million bpd in May this year, but they have since fallen to around 2 million bpd as Asian buyers, including Japan, South Korea and India, began to shun its crude ahead of the sanctions. Iran's foreign minister said officials won't meet with the U.S.at the United Nations General Assembly in NY in September, with sanctions on the Middle Eastern nation's oil industry due to come into effect on November 5.