Brent crude fell to a fresh 47-month low on Wednesday before recovering to around $84 a barrel, as faltering global growth curbed demand for fuel at a time of heavy oversupply.
Oil saw its biggest daily fall in more than three years on Tuesday after the West's energy watchdog slashed its forecasts for world oil demand for this year and 2015, Reuters reported.
Core members of the Organization of the Petroleum Exporting Countries appear to be focused on fighting for market share rather than on cutting production to shore up prices.
Weak European markets and slowing Chinese inflation added to concerns about global growth, which helped extend the rout.
Brent for November touched a low of $83.37, down $1.67, before recovering to $83.90 by 1120 GMT Wednesday. Brent has now fallen more than 25 percent from the year's mid-June peak.
US crude fell $1.30 a barrel to $80.54 after posting its largest fall in a single session in nearly two years on Tuesday. It went down to $80.37 on Wednesday, a 27-month low.
Dealers said technical selling was coming into play, with Wall Street banks scrambling to neutralize exposure to big oil option trades, but the main pressure came from burgeoning global oversupply.
"For as long as OPEC makes no move to tackle this threat of a massive oversupply by reducing production, prices are likely to continue to fall," Commerzbank said in a report. "OPEC producers cannot hope for any reduction in shale oil production in the U.S. in the near future."
Data from the United States suggests no eminent slowing of the boom in shale oil production.
US shale oil production is set to grow by around 106,000 barrels per day in November from October, the US Energy Information Administration said.
On Tuesday, Iran said it could live with lower oil prices, joining the chorus of similar signals from core OPEC members Saudi Arabia and Kuwait.
Analysts said the moves signified a willingness to bring prices lower in an effort to curtail supply growth from non-OPEC producers, such as the United States and Russia. But the IEA said on Monday the vast majority of shale oil in the United States was produced at costs far below prevailing crude prices
