Oil soared 11% today, after industry sources said Saudi Arabia had already made substantial cuts in crude supplies and helped the market recoup earlier losses.
Saudi Arabia, the world's biggest oil exporter, has reduced exports by around 900,000 barrels per day from a peak in August.
US light crude for December delivery $7.43 at $71.34 a barrel by 5.24pm. It had touched a session low earlier of $62.25. Oil suffered its biggest monthly drop ever in October.
London Brent crude was up $7.16 at $67.64 a barrel. Earlier Brent had touched a 20-month low of $58.38.
All markets were awaiting the outcome of the US presidential election.
Saudi Arabia's supply cut eases doubts about whether the world's top exporter would comply quickly with a 1.5 million barrel per day output cut agreed by OPEC in Vienna last month.
Other OPEC members have also cut back. The United Arab Emirates has reduced its production to around 2.3 million barrels per day from around 2.5 million bpd. Qatar has cut exports to Asia by about 40,000 barrels per day from this month.
Crude oil has plummeted from a record above $147 a barrel in July as the credit crisis in the global banking sector has started to hit the wider economy. This has already dampened fuel consumption in the United States, the world's top oil consumer, and other major consumer nations.
US auto sales plunged 32% in October to lows unseen in 25 years, while US factory activity - a barometer for future oil demand - fell to its lowest in 26 years.
