Oil prices held near two-month lows yesterday amid worries that a global crude and refined product glut would weigh on markets for some time to come.

International Brent crude oil futures were trading at $45.51 per barrel at 0623 GMT, down 18 cents from their previous close. US West Texas Intermediate crude was at $44.03, down 16 cents a barrel.

Both benchmarks were close to two-month lows reached last week.

Traders said that ongoing oversupply and growing economic headwinds were weighing on oil.

Crude oil demand from refineries is underperforming product demand

“Global oil demand in Q3 16 is growing at less than one-third the rate it was in Q3 15, weighed down by anaemic economic growth,” Barclays said yesterday.

“Demand support from the OECD has faded, while growth from China and India has slowed,” the British bank said.

Morgan Stanley said headwinds were growing for the second half of the year, leading to an expectation of lower oil prices. It pointed to a resilient US supply, falling demand for transport fuels and oversupply by refiners, particularly in gasoline.

“As a result, crude oil demand from refineries is underperforming product demand by a wide margin,” the US bank said, adding that growing economic risks added further to downside risks for oil.

A strong dollar and a fourth weekly rise in the US oil rig count also weighed on prices, traders said.

Money managers cut their net long US crude futures and options positions, which would profit from rising prices, to a four-month low in the week to July 19, the US Commodity Futures Trading Commission said last Friday.

Libya’s hopes to boost crude exports have been dealt a blow after the head of the National Oil Corporation (NOC) objected to a deal between the government and local guards to reopen key ports.