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New York — Steep declines in US equities led the oil complex lower Wednesday.

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ICE December Brent settled $1.91 lower at $83.09/b and NYMEX November WTI slid $1.79 day on day to $73.17/b.

The prospect of weaker equities and lower-than-expected demand growth overshadowed the impact of Hurricane Michael's landfall in Florida.

"Michael is a devastating storm, but any demand destruction will be short-lived," Price Futures Group senior market analyst Phil Flynn said. "Once they get to rebuilding, that demand will come roaring back."

"But the downturn in stocks is different," Flynn added. "We are seeing some panicking as the market is getting beat up and oil is down."

On Wednesday the NASDAQ Composite Index closed more than 4% below opening levels and the S&P 500 Index was down 3.29% intraday.

"Considering how far down the market is compared to oil, we don't think its that bad. If stocks get a sign of stability, oil will bounce back as the fundamental picture hasn't changed," Flynn said. WTI and Brent futures were down 2.39% and 2.25%, respectively, day on day.

Indeed, the fundamental global supply picture remains bullish overall.

US Energy Information Administration's Short-Term Energy Outlook, which was delayed a day because Monday was a holiday in the US, showed that Iranian oil output averaged 3.4 million b/d in September, down 120,000 b/d from the August outlook and the country's lowest output since February 2016.

Venezuelan output also continued to fall last month, declining about 30,000 b/d from August to 1.23 million b/d in September, EIA said.

These production declines contributed to EIA raising its Brent and WTI price forecasts -- the agency now expects Brent and WTI to average at $74.43/b and $68.46/b, respectively, in 2018.

Despite a bullish near-term supply picture, there are signs that long-term demand may be weaker than expected. Wednesday's market selloff came on the heels of the International Monetary Fund lowering global economic growth forecasts. Citing US-China trade tensions, weaker Eurozone performance, and rising interest rates, the IMF downgraded its growth forecast 0.2 percentage point to 3.7% for 2018 and 2019. A lower growth rate would likely have a negative impact on demand for oil and other commodities.

Bearish comments from BP CEO Bob Dudley also added price pressure. Speaking at the Oil & Money conference in London, Dudley said prices currently above $84/b for Brent were "off the fairway" and even posed a danger to the world economy. BP expects Brent to average in the $60-65/b range over the coming decade, he added.

A focus on hurricane-related demand destruction and stock market declines drove products futures lower Wednesday. NYMEX November ULSD settled 2.89 cents lower to $2.3949/gal and NYMEX November RBOB was down 5.70 cents at $2.0204/gal.

Despite making landfall as category 4 storm, Hurricane Michael was expected to have only a limited impact on oil product supply.

Colonial Pipeline said it was continuing normal operations as Hurricane Michael approached. Colonial's two main pipelines -- the 1.37 million b/d gasoline line and the 1.16 million b/d distillate line -- were "not in the line of the storm," Colonial said Wednesday in a statement.

But Michael is forecast to retain significant strength and move up the Eastern Seaboard later this week, bringing heavy rain and flooding to much of the Southeast. The storm could tamp down end-user demand for gasoline and diesel in the near term. -- Chris van Moessner, christopher.vanmoessner@spglobal.com

-- Edited by Valarie Jackson, newsdesk@spglobal.com