Saudi Arabia cut oil prices for October amid fears of weakening global demand, cutting prices for the United States for the first time. The deep cuts to the Asian market and the new cuts to the American market are the result of dwindling demand amid a heavily oversaturated market that is barely burning through its considerable backlog.

The recent round of cuts by Saudi Aramco targeted two of the largest energy markets in the world: the United States and Asia. Cuts to the Asian market are nothing new; this is the second month in a row that Saudi Arabia slashed prices for Asia, primarily due to weak demand from China. Aramco's cuts to the United States are new, however. The United States, like most of the world, is facing oversupply.

The U.S. is also part of the reason that Aramco has been forced to cut prices. The U.S. is becoming increasingly more prominent in the Chinese oil market, stealing away some of Aramco's market share. China has been importing marked-down American oil for months, stocking its refineries with cheap oil as global prices remain consistently low.

Given the new round of price cuts and continually weakening demand, it's no wonder that some investors are growing more bearish. According to the U.S. Commodity Futures Trading Commission, many investors are revising their previously bullish estimates, with new targets showing a great deal of trepidation by energy investors as the situation continues to worsen. Saxo Bank saw an increasingly vulnerable market ahead.

"Crude oil's failure during the past month to break higher despite several price friendly developments had increasingly left the sector exposed to profit taking," said Ole Hansen of Saxo Bank.

In terms of actual pricing, oil is down considerably since the beginning of September, dealing a substantial blow to gains made in August. West Texas Intermediate (USO  ) crude is down 8.8% since the beginning of September, dropping to $39.11 from $42.85. International benchmark Brent Crude (BNO  ) is down 7.9%, sliding from $45.61 to $42.02.