The oil complex closed down Wednesday, but managed to pare early declines after the dollar weakened on expectations the US Federal Reserve would delay hiking interest rates.
Crude futures on both sides of the Atlantic saw prices plunge overnight before recovering slightly in New York trading.
Front-month NYMEX crude settled down 6 cents at $81.78/b, while ICE November Brent ended down $1.26 at $83.78/b.
In refined products, NYMEX November ULSD closed 1.36 cents lower at $2.4586/gal. Front-month NYMEX RBOB settled down 3.15 cents at $2.1487/gal.
Oil traders remained focused on the supply glut and OPEC's apparent inaction early in the trading session, until the dollar's value started declining, according to Price Futures Group analyst Phil Flynn.
"We came into the day all ready for OPEC to bury us with oil, but what turned us around was lousy US economic data," he said.
Producer prices fell more than expected in September, the Commerce Department said. And the New York Fed's Empire State Manufacturing Index dropped sharply in October.
The fresh data helped push the dollar lower, as investors bet the Federal Reserve would hold off raising interest rates in 2015, Flynn said.
A falling dollar helps boost oil demand, as greenback-denominated commodities, such as crude, become less expensive for holders of other currencies, he said.
Even though the price slide was arrested, crude futures still set multi-year lows Tuesday, underscoring how the momentum behind the current selloff has yet to be exhausted.
Front-month NYMEX crude last closed lower in June 2012. ICE Brent set a front-month low last seen in November 2010.
Despite the price drop, however, the market appears only "modestly oversupplied," Bank of America Merrile Lynch analysts said in a client note Wednesday.
Crude prices should rise in 2015 relative to current levels, the analysts said. They forecast Brent crude at $98/b and NYMEX crude at $90/b on average.
