Oil hits three-month low on supply glut

London - New York oil prices slid on Tuesday to a new three-month low, as the market was dogged by resurgent fears over stubborn oversupply.

At about 10:00, prices for benchmark West Texas Intermediate (WTI) crude quoted in New York dived as low as $42.59 per barrel, while Brent crude approached a similar level at $44.28.

The market was weighed down by reports of rising supplies at the key transit hub of Cushing, Oklahoma, in the United States - which is the world's biggest global oil consuming nation.

"Oil prices (fell) to multi-month lows this morning," said Commerzbank analyst Carsten Fritsch.

"Brent hit a new 2.5-month low ... while WTI is trading at below $43 per barrel for the first time since the end of April.

"Concerns about an oversupply were exacerbated by figures from (data provider) Genscape which suggest that crude oil stocks at Cushing climbed by a good one million barrels last week."

In midday London deals, Brent North Sea crude for September delivery lost 36 cents to $44.36 a barrel compared with Monday's close.

WTI for September was down 42c at $42.71.

After topping $50 a barrel early last month on output disruptions, the cost of crude has tumbled about 15% in recent weeks as the crucial US holiday driving season comes to an end and global demand remains weak.

Traders have been spooked since last week when the US Energy Information Administration said US inventories had fallen less than expected, and that petrol supplies had risen, despite it being peak season for demand in the country.

An increase in the number of rigs coming online - meaning more production - has also dented prices.

Back in February, oil had plunged to near 13-year lows, as world markets were crippled by worries over China's economy, weak demand, a global growth slowdown and a crude supply glut.