World oil prices hit reverse Wednesday following news of surging stockpiles in top consumer the United States, with additional selling pressure from the stronger dollar.
Brent North Sea crude for December dropped seven cents to stand at $86.15 per barrel in late morning London deals.
US benchmark West Texas Intermediate for December delivery sank 70 cents to $81.79 a barrel compared with Tuesday's close.
"Oil prices rolled over again thanks to a stronger dollar and oil inventories much higher than expected," said analyst Jasper Lawler.
"WTI ... could now be headed back down to $80," he added.
The US government's Department of Energy (DoE) revealed Wednesday that American oil inventories surged by 7.1 million barrels in the week to October 17.
That was more than double market expectations for a gain of 3.1 million barrels, according to analysts polled by Dow Jones Newswires.
"Although this was somewhat smaller than the previous week’s 8.9 million-barrel build, it was still much larger than ... expected," said Forex.com analyst Fawad Razaqzada.
Rising US stockpiles can weigh on oil prices because they tend to indicate weakening demand.
The DoE added that stocks of distillates, including heating fuel, rose one million barrels, confounding forecasts for a sharp drop of 1.5 million barrels.
Reserves of gasoline or petrol dipped 1.3 million barrels, which was broadly in line with expectations.
Crude futures had risen in earlier deals on Wednesday as traders eyed recent upbeat Chinese data.
However, oversupply and lingering concerns about demand in key markets are keeping prices close to recent lows.
The oil market had fallen heavily last week, striking multi-year low points on demand fears in the face of mounting global economic worries.
Crude futures have since recovered somewhat, aided by stronger-than-expected Chinese economic growth and oil demand data.
Added to the picture, crude demand is expected to increase during the upcoming northern hemisphere winter months, when heating fuel usage hits a peak.
"The strong selling pressure last week has at least faded considerably," said Commerzbank analysts.
"The latest figures on China’s oil demand have proved better than expected, which together with most of the US economic data being positive has eased concerns about demand.
"As winter approaches in the northern hemisphere, we should see the usual seasonal increase in demand for oil," they added.
Oil prices had risen on Tuesday on better-than-expected data on Chinese growth in the third quarter, especially a pickup in industrial output.
China's third-quarter economic growth rate came in at 7.3 percent, the lowest pace in five years, but faster than many analysts had expected.
That supported prices because China is the world's second biggest oil consumer after the US.
Nevertheless, WTI is still trading close to levels not seen since mid-2012, while Brent remains not far from a four-year low.