Investing.com - Oil futures fell back below the $30-level in Europe trade on Tuesday, as ongoing concerns over a global supply glut and slowing demand dragged down prices.
Crude oil for delivery in March on the New York Mercantile Exchange tumbled 89 cents, or 2.95%, to $29.45 a barrel by 08:45GMT, or 3:45AM ET. A day earlier, Nymex prices dropped $1.85, or 5.75%.
U.S. oil futures plunged below $27 last week for the first time since September 2003, as investors worried that a huge oversupply in crude was coinciding with an economic slowdown, especially in China.
The U.S. benchmark is down nearly 21% this month amid ongoing concerns over a global supply glut.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for March delivery retreated 96 cents, or 3.15%, to $29.54 a barrel. The more actively-traded April Brent contract declined 81 cents, or 2.6%, to $30.50. Brent sank to $27.10 on January 20, a level not seen since October 2003.
Brent prices are down almost 20% since the start of the year as lingering concerns over China’s economic outlook added to the view that a global supply glut may stick around for much longer than anticipated.
China is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.
Global crude production is outpacing demand following a boom in U.S. shale oil and after a decision by the Organization of the Petroleum Exporting Countries last year not to cut production in order to defend market share.
Oversupply issue will be exacerbated further as Iran plans to return to the global oil market after western-imposed sanctions were lifted earlier this month. Analysts say the country could quickly ramp up exports by around 500,000 barrels.
The surge in Iranian shipments is viewed as bearish for crude, which has fallen approximately 75% from its peak of $115 two summers ago, amid a glut of oversupply on markets worldwide.
Most market analysts expect a global glut to worsen in the coming months due to soaring production in North America, Saudi Arabia and Russia.
Meanwhile, Brent's premium to the West Texas Intermediate crude contract stood at 9 cents, compared to a premium of 16 cents by close of trade Monday.