Oil prices sank more than 2 percent on Tuesday, posting a nine-month closing low, on signs of rising production in key parts of the world.
West Texas Intermediate crude oil futures ended Tuesday's session at $43.23, down 97 cents, the weakest settlement since Sept. 16. The U.S. benchmark fell as low as $42.75, the lowest intraday price since Nov. 14, when the contract hit $42.20 a barrel.
WTI fell more than 20 percent from its 52-week closing and intraday highs, putting the commodity in bear market territory.
Prices for WTI's August contract, which became the front-month after the settle, fell 92 cents to $43.51. Trading volume was concentrated in the August contract on Tuesday.
U.S. WTI contract for August
International benchmark Brent crude prices also fell to a seven-month intraday low.
Prices took the fresh leg lower on new signs of rising output from Nigeria and Libya, the two OPEC members exempt from a deal to cut production.
Output from the 14-member exporter group ticked higher in May due to rising production in Nigeria, Libya and Iraq, raising concerns about OPEC's effort to shrink global stockpiles of crude oil. OPEC and other producers have committed to keeping 1.8 million barrels a day off the market through March.
Libya's oil production rose more than 50,000 barrels per day to 885,000 bpd, a Libyan source told Reuters. Meanwhile, exports of Nigeria's benchmark Bonny Light crude oil are set to rise by 62,000 barrels per day in August, Reuters reported.
Oil prices are "most definitely" heading to $40 a barrel and will likely dip into the upper $30s, John Kilduff, founding partner at energy hedge fund Again Capital, told CNBC's "Squawk Box" on Tuesday.
The market is turning lower in part on tanker-tracking data showing unsold crude oil cargoes from Nigeria, he said. U.S. production is also a concern because American drillers locked in prices for future delivery, and so they'll keep pumping even as near-term prices fall, according to Kilduff.