Crude has been caught up in wider market weakness as the U.S. government shutdown, higher U.S. interest rates and the U.S.-China trade dispute unnerved investors and exacerbated worries over global growth.
"The market is still really concerned about demand," said Bernadette Johnson, vice president in market intelligence at DrillingInfo in Denver. The sell-off "doesn't signal strength of confidence in demand, but we still went too far too quick. We still believe $45 is too low."
Recent selling "has felt less fundamentally driven and more a function of the overall market meltdown as increased equity volatility and growing macro concerns have weighed on a number of asset classes," wrote analysts at Tudor, Pickering & Holt.
Funds have incurred heavy losses in oil markets this year, with the average commodity trading adviser fund, or CTA, down by 7.1 percent on the year through mid-December, according to Credit Suisse data. Funds took big bets on oil's rally, only to see the commodity drop by more than 40 percent since the October highs.
The head of Russian oil company Rosneft, Igor Sechin, predicted an oil price of $50-$53 in 2019, a long way south of the four-year high of $86 for Brent crude reached earlier this year.