Global oil futures fell Thursday, resuming their slide after a brief spike following the Federal Reserve's announcement that it would leave U.S. interest rates unchanged.
Economists saw about a one-in-four chance of a rate increase. The dollar eased ahead of the announcement. A weaker U.S. currency can be supportive to dollar-denominated commodities like oil.
Both U.S. crude and Brent extended losses ahead of the 2 p.m. EDT announcement. After the decision was announced, U.S. crude darted into positive territory while Brent pared losses. Within 10 minutes, both benchmarks relinquished gains.
The CBOE oil volatility index fell ahead of the announcement but jumped nearly 15 percent in the minute after the decision. It traded more than 9 percent lower in the day by crude oil settlement.
Many in the market shrugged off the Fed's decision, saying traders will focus instead on other macro factors.
"The oil market will go back to watching to see if the economic slowdown in China spreads to other economies and whether low oil prices start to lower U.S. oil production significantly," said Gene McGillian, senior analyst at Tradition Energy in Stamford, Connecticut.
Analysts suggested a weaker dollar would provide some support to crude oil prices, which were pressured early on Thursday after weak Japanese data revived fears over the prospects for global growth.
Japan's exports slowed a second straight month in August, a sign that China's economic slowdown could be damaging the world's third-biggest economy.
The Japanese figures followed worrying data from other Asian economies, including South Korea and Taiwan, creating anxiety over possible effects of slower growth in China.
"Brent structure has been appreciably weaker than that of WTI (U.S. crude) as it remains much more sensitive to the bearish element of increasing availability of North Sea barrels, excessive OPEC output and Chinese economic concerns," Jim Ritterbusch, president at Ritterbusch & Associates, said in a note.
Brent crude for November delivery fell 67 cents to settle at $49.08 a barrel.
U.S. October crude fell 25 cents to settle at $46.90 a barrel.
Brent's premium to U.S crude slid, and settled at $1.88 a barrel.
U.S. oil output has begun to ease after six years of sharp increases. Energy Information Administration data shows U.S. crude and condensate production peaked at 9.612 million barrels per day (bpd) in April and had declined by 316,000 bpd by June.