Brent crude oil prices continued to fall this morning after shedding more than 2.5 per cent yesterday due to a stronger US dollar and supply concerns.
The global benchmark fell 0.37 per cent to $50.54 per barrel while West Texas Intermediate (WTI) futures fell 0.38 per cent to $47.41 per barrel.
After climbing to two-month highs last week, both crude measures fell to three-week lows yesterday. Henry Croft, research analyst at Accendo Markets, warned that the sell-off could continue as bearish sentiment sends prices towards $49 and $46 per barrel.
The drop came as the US dollar strengthened and concerns were raised over demand in China, which is the second-biggest oil user in the world. Chinese oil refineries operated at their lowest daily rates in nearly a year in July.
The dollar index, which measures the greenback against a basket of currencies, rose 0.4 per cent yesterday and a further 0.25 per cent today after tensions with North Korea eased.
Investors' fears of the growing supply glut were further backed up by Royal Dutch Shell's announcement yesterday that its Nigerian subsidiary lifted a force majeure on Bonny Light crude exports.
Weekly inventory data from the American Petroleum Institute (API) will give further insight on US stockpiles, which are likely to fall for the seventh week in a row, according to a preliminary Reuters poll.