US benchmark West Texas Intermediate (WTI) for April delivery was down 29 cents to $49.16. Brent crude for April fell 17 cents to $58.73 in afternoon trade, reversing gains in the morning.
WTI shed $1.36 in New York and Brent lost $1.32 in London the day before as US crude stockpiles lingered at historic levels, contributing to a global oversupply.
A closely watched report on US weekly crude stockpiles is next due on Wednesday, with a Bloomberg News survey saying inventories are expected to rise by 3.75 million barrels.
US oil stockpiles are already at their highest level on record at this time of year.
Globally, crude supplies are also being boosted after oilfields in eastern Libya resumed pumping to the port of Hariga after a pipeline was repaired, and oil producer Oman plans to ramp up output to 980,000 barrels a day this year, according to Bloomberg. Crude prices lost about 60 percent of their value to about $40 between June and late January owing to an oversupply in world markets, a weak global economy and a strong dollar.
Prices have risen above multi-year lows following a slowdown in US oil drilling activities, but analysts say volatility is likely to continue for some time.
“It is apparent by now that drilling in the US will slow, global production growth is expected to be lower, and demand, at least in the US, is reacting positively to lower prices,” British bank Barclays said in a report. “In short, the market is forecast to remain oversupplied for most of 2015, but expectations beyond that are for more balanced fundamentals.”
Source, The Nation February 25, 2015