Oil prices have dropped towards $44 a barrel due to fears that a prolonged rebalancing of the market may be delayed due to oversupply.

Global benchmark Brent was down 28 cents and traded at $44.44 a barrel, while US crude slipped 43 cents at $42.70, Reuters reported.

UK-based oil major BP reported lower-than-expected profits in its second-quarter results and said its refining margins were also weak.

"We do see the market coming into balance, it may already be there."

Concerns about supply glut increased, following higher crude output from the Organization of the Petroleum Exporting Countries (OPEC) and due to signs of more drilling activity in the US amid weak oil prices. 

Shale drillers in the US added oil rigs for a fourth consecutive week.

The fall in the country’s output has been key to balancing a market which is weighed by oversupply for two years.

BP Chief Executive Bob Dudley told the news agency: "We do see the market coming into balance, it may already be there.”

Analysts are watching for inventory reports to be released by the American Petroleum Institute and the US Department of Energy this week.