Investing.com - West Texas Intermediate oil prices reversed gains in U.S. trade on Tuesday, as ongoing concerns over the strength of the global economy added to uncertainty about how quickly the global glut of crude is set to shrink.
Crude oil for delivery in March on the New York Mercantile Exchange shed 62 cents, or 2.04%, to trade at $29.77 a barrel by 15:15GMT, or 10:15AM ET after rising by as much as 3.1% to a session peak of $31.36.
On Monday, Nymex prices dropped to $29.35, the weakest level since October 2003. New York-traded oil futures are down nearly 19% since 2016 began.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for March delivery tacked on 39 cents, or 1.37%, to trade at $28.94 a barrel during morning hours in New York.
Prices rallied to $30.24 earlier in the day after China's fourth quarter growth met expectations and sparked hopes for more stimulus from Beijing to support the world’s second largest economy.
China is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.
London-traded Brent prices sank to $27.67 on Monday, a level not seen since October 2003, before recovering slightly to end at $28.55, down 39 cents, or 1.35%.
Monday’s losses came as Iranian exports were set to resume after Western sanctions were lifted, fueling fears over increased supplies amid a global supply glut and slowing demand.
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.
Brent prices are down almost 22% 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.
Meanwhile, Brent's discount to the West Texas Intermediate crude contract stood at 83 cents. U.S. crude has been firmer relative to Brent lately, on signs that the U.S. oil market is likely to grow tighter following Congress' decision to lift a 40-year old ban on domestic oil exports, while a global glut gets worse in 2016 due to soaring production in Saudi Arabia and Russia.
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.