Oil extended losses on Wednesday to hover near a six-month low on demand concerns and apprehensions that the OPEC+ alliance may not comply with the supply cuts.
As demand worries intensify and prices drop, it is speculated that oil producers could unwind production cuts next year and "flood the market" to fight for market share.
Benchmark Brent crude futures dropped half a percent to $72.88 a barrel after touching their lowest level since late June on Tuesday amid concerns of softening demand and oversupply. WTI crude futures were down 0.4 percent at $68.34.
Concerns over Chinese recovery weighed on prices in the absence of fresh stimulus measures from Beijing at the Central Economic Work Conference to revive the housing market. On the positive side, an estimated decline in U.S. crude stocks helped limit the downside in oil prices.
The American Petroleum Institute late Tuesday reported an increase of nearly 600,000 barrels in U.S. crude oil inventories, against expectations of a decline of 2.6 million barrels.
Official inventory data from the U.S. Information Administration (EIA) is due later in the day.
The EIA in its latest short-term energy outlook report raised its forecast for supply this year by 300,000 bpd to 12.93 million bpd from its previous report.
