Crude slumped last week after a shock rise in US stockpiles, up 3.3million barrels to 513million, according to the Energy Information Administration (EIA).
Brent crude slipped to about $48 a barrel, its lowest level since December, and analysts said it could go sharply lower.
Crude dipped below $27 a barrel in January last year and Chris Beauchamp, chief market analyst at online trading platform IG, said a repeat of those levels is a distinct possibility: “Crude tends to overshoot on both the upside and the downside.”
The oil price recovered after Opec and non-Opec producers agreed to cut output last December, but Beauchamp added: “The world is still drowning in oversupply.”
Shale drillers have made up for reduced output and the EIA predicted last week that daily US production could hit a record 10million barrels next year.
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