Both crude benchmarks hit new multi-month lows on Wednesday after U.S. government data revealed a surprise rise in crude and gasoline inventories. The build added to an already huge global refined product glut just as slowing economic growth dents the demand outlook.
Following the report, Bart Melek, head of commodities strategy at TD Securities, told CNBC oil could be heading to its 200-day moving average at around $41 per barrel.
Surplus barrels of gasoline have raised concerns about a renewed glut of feedstock crude oil. U.S. Gulf Coast gasoline stocks hit record highs last week for a July month, while East Coast inventories reached all-time peaks, government data showed on Wednesday.
Market intelligence firm Genscape added to the bearish sentiment on Thursday, reporting a build of nearly 328,000 barrels at the Cushing, Oklahoma delivery hub for U.S. crude futures during the week to July 26, traders who saw the data told Reuters.
Oil markets have been dogged by oversupply for the last two years and fell by as much as 70 percent between 2014 and early 2016, when Brent hit the lowest in more than a decade at around $27 per barrel.
Markets have since recovered some ground but oil remains very weak and low refining margins are hurting energy companies.
Energy major Royal Dutch Shell reported a more than 70 percent fall in quarterly profit on Thursday, well below analysts' estimates, as weak oil and gas prices further ate into revenue.
Shell's net income came in at $1 billion in the second quarter, compared with expectations of $2.2 billion and $3.8 billion achieved in the same period last year.