Oil fell further below $50 per barrel today, amid fresh concerns that weak economies in Asia would sap demand there.
Brent crude, the global benchmark, fell 1.24 per cent to $46.18 per barrel in early afternoon trading. Its US counterpart, West Texas Intermediate, slumped 1.32 per cent to $44.81.
Both benchmarks had ended last week around eight per cent lower — which was the largest five-day slide for Brent in six months.
Traders told Reuters that today's low prices reflected price cuts in Asia, as well the region's economic slowdown.
"Economic run cuts are finally starting in a few markets, but more may be needed ... The implied, but delayed, ripple effect into crude demand is not helpful for oil balances and prices," Investment bank Morgan Stanley said.
In Japan, core machinery orders unexpectedly fell 1.4 per cent month-on-month in May. Data released yesterday showed Chinese core inflation last month held below the official target of around three per cent, indicating weak demand.
Meanwhile, there's mounting evidence US shale producers can weather $45 per barrel oil. Oil drillers added rigs for the fifth week in six, while US oil bankruptcies subsided last month.
But one analyst said that the oil market was ignoring signs which point to a sooner-than-anticipated uptick.
"Strong demand and declining US oil production ... should help to limit the downside for oil. What’s more, inventories are falling, which can only be good news. I therefore still think that it will be a matter of time before oil prices head north of $50 again," Fawad Razaqzada, analyst at Forex.com, said.