Oil prices slide on oversupply, economic headwinds
(Reuters) 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/barrel at 1334 GMT, down $0.83 from their previous close, and at their lowest since May 11. US crude was down $0.92 at $43.28/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 (US Department of Energy) stats, this could be a catalyst for additional downside," the bank said.
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 anemic 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 US supply, falling demand for transport fuels and oversupply by refiners.
But consultancy Energy Aspects said the oil market was beginning to show small signs of "normalcy" in supply-and-demand balances.
"Crude markets are slowly tightening and are now more resilient in the face of falling refinery demand for crude," the consultancy said.
"We do not mean that the rebalancing is over, or even close to being over, but nevertheless, we are now in a new market paradigm where the steps towards normalcy begin."
New tensions in Libya highlight that the OPEC member is unlikely to see a significant boost to its oil exports any time soon, after the national oil corporation said it objected to a deal to reopen key ports.
A strong dollar and a fourth weekly rise in the US oil rig count also weighed on prices.
Reporting by Ahmad Ghaddar; Additional reporting by Henning Gloystein and Osamu Tsukimori; Editing by Dale Hudson and William Hardy
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