Brent crude was down $0.44 at $43.09 a barrel at 0854 GMT (4:54 a.m. ET) from the previous settlement, after reaching an intra-day high of $43.85 in earlier trade.
U.S. West Texas intermediate was $0.40 lower at $41.20 a barrel, after hitting an intra-day high of $41.88 earlier.
“Sentiment remains quite negative following the price slump recently. It is negative because rebalancing takes longer than some market participants thought before,” said Eugen Weinberg at Commerzbank.
“Reuters data shows yet another increase in OPEC production, helped by production hikes in Nigeria and Iraq. There is also data pointing to yet another increase in the rig count in the U.S,” he added.
Last week, a Reuters survey showed that OPEC’s oil production in July is likely to reach its highest in recent history.
On Monday, Iraqi oil officials said oil exports from Iraq’s southern ports rose to 3.2 million barrels per day (bpd) on average in July, up from 3.175 million bpd in June, as the OPEC nation increased crude production.
Also on Monday, Iran’s oil minister said the oil market was oversupplied but said balance between demand and supply will be restored, Iranian state television reported.
“Prices remain under pressure but we think they are likely to find a floor at around $40 and increase to $50 by the year end,” Weinberg said.
French bank Societe Generale said that the global oil market has shifted from massive oversupply to broadly balanced in the second half of this year and first half of next year.
Analysts at the bank expect crude prices to bottom out in the high $30s and should not return to lows of $26-27 seen in the first quarter of this year.
Earlier on Monday, Barclays said Brent crude has averaged $46.50 in the third quarter so far and could fall further from current price levels.
The global glut of oil still weighs on the market and even though summer is a good time to make supply adjustments, it is already halfway over, the bank said in a research note.
“Demand growth remains lackluster and has not made significant inroads to clear the inventory overhang for oil,” Barclays said.
“With the macroeconomic picture worsening and Saudi Arabia unlikely to exhibit much restraint as Iran seeks incremental market share, refineries are going to find themselves in the line of fire,” Barclays added.