LONDON - Oil prices fell to two and a half month lows on Monday amid worries that a global glut of crude and refined products would weigh on markets for some time.
Brent crude futures were trading at $44.86 a barrel at, down 83 cents from their previous close, and at their lowest since May 11. U.S. crude was down 92 cents at $43.28 a barrel, its lowest since May 10.
Traders said oversupply and growing economic headwinds were weighing on oil.
"The potential for larger-than-normal stock builds is growing," Morgan Stanley said in a note.
"With the market increasingly trading on DOE (U.S. Department of Energy) stats, this could be a catalyst for additional downside," the bank said.
ADVERTISEMENT
Barclays bank said global oil demand in the third quarter of 2016 was expanding at less than a third of the year-earlier rate, weighed down by anaemic economic growth.
Demand support from developed economies had faded, while growth from China and India had slowed, Barclays said.
Morgan Stanley added that headwinds were growing for the second half of the year, leading to expectations of lower oil prices. It pointed to resilient U.S. supply, falling demand for transport fuels, and oversupply by refiners.
"As a result, crude oil demand from refineries is underperforming product demand by a wide margin," the bank said.
But consultancy Energy Aspects said the oil market was beginning to show small signs of "normalcy" in supply-and-demand balances.
