Oil prices fell as much as 3 percent on Tuesday after a series of gloomy predictions on demand growth that suggested the global overhang of unused inventories may persist for longer than anticipated.
The International Energy Agency, which advises oil-consuming countries on their energy policies, said a sharp slowdown in oil demand growth, coupled with ballooning inventories and rising supply, means the market will be oversupplied at least through the first half of 2017.
This contrasts with the agency's last forecast a month ago for supply and demand to be broadly in balance over the rest of this year and for inventories to fall swiftly.
The IEA's comments follow a surprisingly bearish outlook from the Organization of the Petroleum Exporting Countries on Monday that also pointed to a larger surplus next year due to new fields in non-member countries and as U.S. shale drillers prove more resilient than expected to cheap crude.
Brent crude futures were trading down $1.26, or 2.61 percent, at $47.06 per barrel at 2:49 p.m.
U.S. West Texas Intermediate futures fell $1.39, or 3 percent, to $44.90 a barrel.