Oil prices fell close to three-month lows on Wednesday after US industry data showed weekly oil stocks declined by less than expected, feeding into concerns over persistent oversupply dragging down prices.
Global benchmark Brent crude was on track for the first monthly loss since January and the largest of 2016. Futures traded down 55 cents at $44.32 a barrel. US West Texas Intermediate crude was trading down 28 cents at $42.64 a barrel, close to a three-month low of $42.36 reached on Tuesday, CNBC reported.
Weekly industry data from the American Petroleum Institute late on Tuesday showed that US crude stocks fell by 827,000 barrels in the week to July 22, well short of the 2.3 million barrel draw that had been expected.
Some analysts said they expect prices to fall further in the short term as oversupply persists while demand growth stutters.
"My view is that oil prices will find a low between $39 and $42 per barrel over the coming weeks," said Ric Spooner, chief market analyst at CMC Markets, a UK-based financial derivatives dealer.
"After that, however, we are coming closer to seeing a balanced market again," he added, saying that $50-$60 a barrel would represent such supply and demand balance.
Eldar Saetre, chief executive of Norwegian state oil producer Statoil, said he expects the market to fall into balance over the course of this year.
"We see clear signs that we are on our way to a balanced oil market," he said.
But financial services firm Morgan Stanley predicted numerous “worrisome trends” for the supply and demand of oil, chief of which is an excessive production of gasoline by refineries.
It said the price of oil will likely continue to falter in the latter half of this year amid an oversupply of gasoline.
