By Devika Krishna Kumar
Brent crude futures dropped 2.8 percent, or $2.27, to $77.56 a barrel by 11:21 a.m. EDT (1521 GMT) after plunging to $77.50, the lowest since Sept. 18.
U.S. crude fell $1.98, or 2.9 percent, to $67.38 a barrel, after hitting a session low of $67.26, the lowest level since Sept. 7
Saudi Energy Minister Khalid al-Falih told a conference in Riyadh on Tuesday the oil market was in a "good place" and he hoped oil producers would sign a deal in December to extend cooperation to monitor and stabilise the market.
"We will decide if there are any disruptions from supply, especially with the Iran sanctions looming," Falih said. "Then we will continue with the mindset we have now, which is to meet any demand that materialises to ensure customers are satisfied."
Falih said he would not rule out the possibility that Saudi Arabia would produce between 1 and 2 million barrels per day (bpd) more than current levels in future.
U.S. sanctions on Iranian oil begin on Nov. 4 and Washington has said it wants to stop all of Tehran's fuel exports, but other oil producers are pumping more to fill any supply gaps.
Wall Street sank about 2 percent on Tuesday as disappointing forecasts from industrial bellwethers Caterpillar and 3M added to risk-averse sentiment.
"Tariff concerns, renewed weakening in Chinese equities, emerging market worries and the ongoing investigations of the Saudi participation in the Khashoggi murder are combining to force major liquidation out of the equity space that is easily flowing into the oil complex," said Jim Ritterbusch, president of Ritterbusch and Associates in a note.
The oil market has been concerned that Saudi Arabia might cut crude supply in retaliation for potential sanctions over the killing of journalist Jamal Khashoggi. Falih said on Monday there was no intention of doing that.
Economist Intelligence Unit energy analyst Peter Kiernan said it would be self-defeating for Saudi Arabia to cut oil supply, as it would risk losing market share to other exporters while losing its reputation as a stable player in the market.
Meanwhile, Russia's oil production is currently 150,000 bpd higher than the October 2016 level, the baseline for the global oil production deal, TASS news agency quoted Energy Minister Alexander Novak as saying.
South Korea's crude imports from Iran fell to zero in September, data from state-run Korea National Oil Corp showed.
However, U.S. crude oil production has climbed by almost a third since mid-2016, and the rising output could help to offset the loss of exports from Iran.
U.S. crude inventories were expected to have risen for the fifth straight week last week, according to a Reuters poll ahead of weekly data from the American Petroleum Institute (API) at 4:30 p.m. EDT (2030 GMT) on Tuesday, and the Energy Information Administration (EIA) report on Wednesday morning.
(Reporting by Devika Krishna Kumar in New York Christopher Johnson in London and Henning Gloystein in Singapore; Editing by Marguerita Choy and David Goodman)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)