Earlier, the global benchmark hit a session high of $79.51. USA crude (CLc1) was down $3.00 at $71.11 a barrel.
"That's while Saudi Arabia told OPEC it pumped about 10.5 million barrels of crude a day last month as the kingdom sought to cap rallying prices by ramping up output, according to people familiar with the matter", writes Bloomberg. That decline was larger than expected, causing crude futures to gain in post-settlement trading.
Brent crude futures were down 65 cents, or 0.8 percent, at $78.21 a barrel by 0627 GMT, having fallen to as low as $77.60.
Supply risks look to be worsening, with a strike curtailing oil production off Norway for the first time in six years.
All three major stock indexes were up, with the S&P 500 at a four-month high.
However, oil prices have been volatile in recent weeks after the USA said it would reinstate sanctions against Iran, a major producer. "Before that, it was in the $1s/b [premium to Dated Brent] range", a sweet crude trader at a trading house said. But it all depends on which countries they're talking about. "Is it India?. Is it temporary waivers?"
U.S. Secretary of State Mike Pompeo said on Tuesday that Washington would consider requests from some countries to be exempt from sanctions due to go into effect in November to prevent Iran from exporting oil.
Saudi Arabia said that it pumped almost 10.5 million barrels per day last month, compared with 10 million in May.
"Working in the opposite direction of the Norwegian oil workers strike and the geopolitical situation" was the update on the Syncrude oil sands facility, said Yawger at Mizuho.
While it's "very unlikely" that the United States will be successful in curbing Iranian exports to zero, the more aggressive threat of sanctions is expected to force about 800,000 to one million barrels a day of the producer's crude off the market by November, Ehsan Khoman, head of Middle East and North African research at Mitsubishi UFJ Financial Group Inc, said in a July 10 note.
The updated timeline has muted US price gains and widened the difference between the two benchmarks, said Yawger.
Asian refiners have been keeping a close eye on the new round of Middle Eastern crude OSPs this week, with many regional end-users hoping for some discounts after OPEC and its allies had agreed in late-June to increase output by more than 1 million b/d.
Escalating economic growth concerns over trade and the return of Libya to the oil market on Wednesday sent oil prices lower before markets opened.