Oil prices fell on Thursday as investors considered the potential for oversupply and weakening demand in the U.S., the world's largest oil consumer.

The benchmark West Texas Intermediate (WTI) crude contract on the New York Mercantile Exchange dropped $0.17, or 0.29%, to settle at $59.43 per barrel.

Brent crude futures declined by $0.14, or 0.22%, closing at $63.38 per barrel.

Global oil prices recorded a third consecutive monthly decline in October amid concerns that rising production from both OPEC+ and non-OPEC producers could lead to a supply surplus.

"The market remains haunted by one of the clearest signals of oversupply in history, which is capping prices," said John Kilduff, a partner at Again Capital.

However, weak demand remains a key focus. JPMorgan noted in a client report that global oil demand grew by 850,000 barrels per day in the year to November 4, below its previous forecast of 900,000 barrels per day.

"High-frequency indicators suggest U.S. oil consumption remains sluggish," the report stated, citing weak travel activity and declining container shipping volumes.

In the previous session, prices fell after the U.S. Energy Information Administration reported a 5.2 million-barrel increase in crude inventories to 421.2 million barrels.

"Low refinery utilization indicates that the U.S. currently lacks strong crude demand due to the significant refinery maintenance season. This is fundamentally pressuring prices," Kilduff added.

Saudi Arabia, the world's top oil exporter, sharply reduced December crude prices for Asian buyers in response to ample supply as OPEC+ producers ramp up output.

"We believe downside pressure on oil prices will dominate, supporting our below-consensus forecast of $60 per barrel by end-2025 and $50 by end-2026," Capital Economics said in a report.

Analysts noted that recent sanctions on Russia's largest oil company two weeks ago had raised concerns about supply disruptions, partially limiting price declines despite rising OPEC+ production.

Reuters reported this week that Lukoil is facing operational challenges in its overseas business due to sanctions.

"(Sanctions) have had a minor impact on prices, but not a significant one," said Jorge Montepeque of Onyx Capital Group. "The data suggests the effect should be larger, but the market still needs convincing."