Both crude benchmarks are now down around 20 per cent since their last peak in June
Oil prices fell to their lowest levels since April on Friday, with Brent on track for its biggest monthly loss since December 2015, pressured by slowing economic growth that threatened to increase a supply overhang of crude and refined products.
Brent crude oil futures were trading at $42.20 by 1322 GMT, down 50 cents, after hitting $41.82, their lowest since April. The benchmark was poised for a monthly loss of more than 15.5 percent, its biggest since December 2015.
US West Texas Intermediate (WTI) crude fell 18 cents to $40.96 a barrel, after earlier in the day slipping below $41 for the first time since April. It was on track for a monthly loss of at least 15 per cent, the biggest in a year.
Both crude benchmarks are now down around 20 per cent since their last peak in June.
The glut has taken the edge off supply disruptions in Libya and Nigeria, particularly as high stocks of oil products had cast doubt on refinery demand.
"Doubts are rife as to whether the oil supply imbalance is indeed slowly drawing to an end," Stephen Brennock of oil brokerage PVM, said.
"Oil prices should eventually resume their upward journey but it will be a subdued affair with the huge stock overhang tempering gains until the end of next year at the very least," he said.
Cheap crude has led refiners to produce lots of refined products, which has pushed down margins worldwide. ExxonMobil reported a profit fall of more than 60 per cent in its refining unit, while BP and Royal Dutch Shell also reported declining earnings.
Italian oil company ENI said on Friday its standard refining margin in the second quarter was roughly half the level of last year at just $4.60 per barrel.
Data showing weaker-than-expected growth in the US economy on Friday also cast a shadow on potential oil consumption growth.
On the supply side, Iranian exports to Asia's main buyers - China, India, Japan and South Korea - jumped 47.1 per cent in June from a year ago to 1.72 million barrels per day, the highest levels in over four years.
The sales jump is the latest sign that Tehran's aggressive moves to recoup market share, lost under international sanctions, are paying off.
Because of oversupply, US bank Goldman Sachs said this week it did not expect a big recovery in prices any time soon, projecting that oil prices will remain in a $45 per barrel to $50 per barrel trading range through mid-2017.
Still, oil analysts in a Reuters survey said they expected a rise in the crude price this year on improving demand growth.
Image: An offshore oil platform is seen at the Bouri Oil Field off the coast of Libya. Photograph: Darrin Zammit Lupi/Reuters
Additional reporting by Henning Gloystein in Singapore.