Oil prices slumped to three-month lows on Monday and the bearish sentiment not expected to shift any time soon thanks to a crisis in Greece, the stocks rout in China and Iran supply fears.
Amrita Sen, chief oil analyst at Energy Aspects consultancy, told CNBC that Brent crude could fall to $55, while U.S. oil prices could weaken to the low-$50s-a-barrel range.
"This is all about the macro picture right now – Greece, the Chinese stock market and the stronger dollar, which are all having a big, big, impact on oil," she said.
Concerns that Greece is fast heading to an exit of the euro zone after voters rejected creditor bailout terms on Sunday and a slump in Chinese stocks have fueled worries about weak demand growth at a time when oil markets have already been hit by a glut of supply.
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Turmoil in China's stock markets has sparked concern that a slowdown in the Chinese economy -- the second largest in the world -- could become more pronounced, reducing demand for oil.
And in addition to Greece and , there's a stronger dollar which often pressures oil prices by making the commodity more expensive for holders of other currencies. The dollar index, which measure the dollar's value against other major currencies, was as much as 0.5 percent higher on Monday.
"It's really not a good time to be long the oil markets," Lara Magnusen, portfolio manager at Altegris Investments, told CNBC Asia on Monday.
Oil prices, with Brent crude sliding more than 60 percent between June last year and January, have recovered some ground in recent months, climbing to almost $70 a barrel in early May.
Analysts said while they remained positive on the outlook for demand, supply and risks to the global economy in the form of Greece and China would continue to drive oil prices in the near term.
"Demand has recovered, but OPEC (the Organization of the Petroleum Exporting Countries) is still producing close to 31 (or) 31.5 million barrels a day and that has negated any positive impact from reduced rig counts in the U.S.," Barclays Oil Analyst Miswin Mahesh told CNBC.
Data released last week showed oil rig counts in the U.S. rose for the first time since December in a sign that the recovery in oil prices was now encouraging producers to ramp up production.
Don't forget Iran
A possible nuclear deal between Iran and global powers, meanwhile, could add to the supply in oil markets if sanctions are eased, adding downward pressure to oil prices.
"A deal seems a little optimistic, but I don't think we should underestimate Iran. They have every incentive to increase their outputs and exports, but just how quickly it takes to get on line will depend on technology and their ability to get productivity from oil reserves," said Altegris Investments' Magnusen.
"A lot depends on whether they can reach a deal. They may not come online until 2016, but we are seeing that expectation of supply pressure markets."
There is a Tuesday deadline for Iran and six world powers to reach an agreement on the country's disputed nuclear program.