The "climb in USA crude stocks plays into the market worries over weak demand".
Diminished gasoline and distillate inventories provided a bright spot, but signs that the pandemic-stricken global economy will take longer than anticipated to recover weighed on US stocks and pressured oil prices.
Brent crude was down 8 cents, or 0.2%, at $39.98 a barrel by 0110 GMT, after falling almost 2% on Thursday, while US crude was off by 2 cents at $37.28 a barrel, having fallen 2% in the previous session.
Brent for November settlement fell 23 cents to $39.83 a barrel.
Futures in NY fell toward $37 a barrel after rising 3.5% Wednesday. Still, the three main United States stock indexes were headed for a second straight weekly decline as recent economic indicators suggested a long and hard recovery from the pandemic.
The uncertainty over how much supply OPEC+ is returning to the market adds another wrench in the recovery for oil prices still reeling from the pandemic-driven blow to consumption.
Also dampening the market mood, the US Senate killed a Republican bill that would have provided around $300 billion in new coronavirus aid.
The American Petroleum Institute reported crude stockpiles climbed by about 3 million barrels last week, according to people familiar with the data, though gasoline inventories fell by 6.89 million barrels.
Traders are starting to book tankers again to store crude oil and diesel, another signal of oversupply amid a stalled economic recovery as the COVID-19 pandemic continues. "Combined with the likely impact on European economies of increasing COVID-19 counts, the Saudi cut seemed to confirm that demand will remain too weak to boost crude prices".
Record supply cuts by the Organisation of the Petroleum Exporting Countries and allies, known as OPEC+, have helped support prices, but with grim economic figures being reported nearly daily, the outlook for demand for oil remains bleak.
"U.S. oil production is going to be under a lot of pressure for the foreseeable future because a lot of these companies have gone bankrupt, they've been under financial duress for a while now", said Josh Graves, senior market strategist at RJ O'Brien & Associates LLC.