Oil prices have declined for the third consecutive session as concerns of oversupply and increased output from the US continue to rise.
The international benchmark for Brent crude oil futures dropped 83 cents from their last close to trade at $58.78 per barrel, while US West Texas Intermediate (WTI) fell by 87 cents to $49.01 a barrel, reported Reuters.
Since early October, both oil benchmarks have lost more than 30% of their value due to growing global inventories.
Traders told the news agency that the market continues to be under pressure over doubts that the output-cuts led by the Organization of the Petroleum Exporting Countries (OPEC) may not eliminate oil glut.
Slowing global economic growth prospects have also cast doubts over future oil demand.
According to the US Energy Information Administration, production from seven US shale basins will increase to more than eight million barrels per day (bpd) by the end of this year, further straining the oil prices.
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The US has become the largest oil producer in the world, with total crude output rising to 11.7 million bpd.
Phillip Futures analyst Benjamin Lu Jiaxuan said: “Rising US shale production levels, along with a deceleration in global economic growth, has threatened to offset OPEC+ efforts as markets weigh the potential of looser fundamentals.”
Market analysts added that the drop in global oil prices will force small and unprofitable shale producers to stop operations.
They have also shared their concern over reports that the US Federal Reserve is planning to raise interest rates, which may affect the oil market.