×

Resurgence of supply glut fears send oil to 3-month lows

After jumping over 20 percent in the second quarter of the year, oil prices hit three-month lows on Monday, threatening to put the brakes on a fragile recovery.

Resurgent concerns over supply-demand mismatches have hurt sentiment, analysts said.

"It's not just in the U.S. In Asia, if you look at Chinese gasoline demand growth, it was 10 percent last year. This year, it's tracking the mid-single digits," said Scott Darling, JP Morgan's Asia Pacific oil and gas head of research.

On Tuesday in Asia, crude oil futures were mostly flat after the rout overnight.

U.S. West Texas Intermediate crude oil futures were up 0.2 percent at $43.20 a barrel while Brent crude oil futures were up 0.4 percent at $44.88 a barrel.

A worker grabs a nozzle at a PTT gas station in Bangkok, Thailand, January 5, 2016.
Athit Perawongmetha | Reuters
A worker grabs a nozzle at a PTT gas station in Bangkok, Thailand, January 5, 2016.

Meanwhile, U.S. rig count increased slightly quarter-on-quarter, while confidence over geopolitical risks in Libya also improved.

WTI crude fell to an intraday low of $42.97 a barrel overnight, its lowest since April 26, while Brent crude hit $44.55 a barrel, the lowest since May 10.

JP Morgan was forecasting global oil demand growth slightly under 1 million barrels a day for the year.

Darling said prices were likely range-bound currently and the bank's forecast for Brent this year averages $47 a barrel while its forecast for next year was $57 a barrel.

Follow CNBC International on Twitter and Facebook.