U.S. crude prices held slightly higher in afternoon trade, at about $30.50, but well below its session highs of $31.70.
Eric Lee, commodities strategist at Citigroup, said Wednesday oil could fall below $20. "In the first half of this year, there's going to be a lot more that buffets this market. For now, it's going to be hard for longs to join the market, so you could well see us back into the $20s again," he said on "Squawk on the Street."
"I think that what we've seen is a massive, structural change in oil markets due to a technological shock that was not necessarily predictable, and that was shale," Lee said. "If you ask me, the 2000s were a story of massive commodity-intensive growth in China. It was a period of time when they were organizing extremely quickly, industrializing extremely quickly, which is very commodity intensive."
— Reuters contributed to this report.