West Texas Intermediate for December delivery declined 26 cents to end the session at US$59.93 a barrel on the New York Mercantile Exchange. However, the US has granted waivers to certain major importers of Iranian crude, diminishing the expected cuts.
On Monday, oil prices dipped slightly as Washington's sanctions against Iran and waivers from the sanctions came into force on this day.
Meanwhile, WTI has traded at a discount of $8 to $10 per barrel relative to the global Brent crude benchmark recently.
The sanctions lifted supply concerns and concerns over economic slowdown, which may curb fuel demand.
This time, Saudi Arabia is urging allies to focus on the risk of rising oil inventories and forecasts for massive growth in rival supplies next year including USA shale. However, the USA has granted waivers to certain major importers of Iranian crude, diminishing the expected cuts.
Taiwan was flat, Seoul slid 0.3% and Sydney closed up 0.3%.
Crude oil futures have spiked in early trade on Monday, following reports that Saudi Arabia will cut production levels in December. Analysts believed the exemptions relieved concerns over volatility in global market caused by US sanctions against Iran.
There have also been signs that renewed United States sanctions on Iranian oil exports may have a softer-than-expected impact.
Opec member states and allies led by Russian Federation could consider cutting up to a million barrels per day, if needed, after the group raised concern over higher global supply hitting the markets next year, the Saudi oil minister said on Monday.
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For over seven months, Hamas has been leading protests along the Israeli border aimed in large part at breaking the blockade. Conricus said all of the buildings targeted by the Israeli military were "owned, operated and used by Hamas".
The south American OPEC nation's current oil output is 1.5 million barrels per day and it aims to increase that by 1 million bpd "soon", he told reporters in Abu Dhabi.
USA gasoline inventories increased by 1.9 million barrels, while distillate fuel inventories decreased by 3.5 million barrels, EIA said.
The OPEC said later that its member countries are ready to meet global oil market needs in case of any politically-motivated fall in supply, and "maintain their continuous efforts in pursuing a balanced and sustainably stable global oil market". Russia, the world's second-biggest producer, said it would commit to any new agreement among producers to cut output. Speculation is rife that other Organisation of the Petroleum Exporting Countries, or OPEC, may announce similar cuts. Just months ago Saudi Arabia, under pressure from President Donald Trump, was opening up the taps in a bid to prevent $100 oil. Prior to Monday's increase, crude futures had fallen for 10 straight trading sessions.
But producers eased output cuts in June after signs of a tighter market and higher prices, selling hundreds of thousands of extra barrels. They fell below the 60-dollar mark.
Meanwhile, investors' sentiment is clouded by uncertainty over how oil demand would develop, as some industry insiders predicted deteriorating demand.
Oil's slide accelerated on Tuesday, with USA futures suffering their steepest one-day loss in more than three years due to ongoing worries about weakening global demand and oversupply. First, while the USA oil rig count is still well below the highs seen in 2014, the rig count has almost tripled since May 2016, and efficiency has improved dramatically over the past few years.
The market will keep a close watch on the following USA oil inventories.
This has left OPEC scrambling to adjust its own output, which, at around 33.3 million bpd, accounts for roughly a third of global supply.