Oil prices edged up on Tuesday after U.S. crude broke below $40 per barrel the previous session, but traders said fuel markets continued to be dogged by excess production, Reuters reported.
U.S. West Texas Intermediate (WTI) crude was at $40.21 a barrel at 0649 GMT (2:49 a.m. ET), up 15 cents from its last close after dipping below $40 for the first time since April the previous session, Reuters wrote.
International Brent crude oil futures were trading at $42.33 per barrel, up 19 cents from their last close.
Despite the slightly higher prices on Tuesday, oil market data implies bearish market conditions, according to the report.
Industry data shows that the global oil rig count for new production edged up in June for the first time this year, rising by two to 1,407, largely thanks to an uptick in U.S. drilling.
Actual production in the United States is also up slightly, according to government data, and it`s also rising in OPEC-member Iraq, Reuters writes.
Financial oil traders have taken note of the glut, with hedge funds taking on large volumes of bets that would profit from lower prices, known as shorts.
Analysts said that high production levels in crude and the refining sector would continue to weigh on markets after contributing to a 20% price fall since June.