Analysts attributed the decline to a somewhat weaker demand outlook after US gasoline inventories increased steadily.
The latest data from the US Energy Information Administration shows US gasoline stocks rose by 1.9 million barrels, compared with an expected drop of nearly 2 million barrels.
As the biggest consumer of gasoline in the world, any further deterioration in demand in the US will impact the overall global oil outlook, especially after coronavirus cases have once again spiked in North America and Europe.
The jump in US gasoline inventories comes at a time of intense focus on historically high oil stockpiles across OECD countries which poses questions about when we will see a sustained recovery in crude oil consumption.
The market is also facing rising supply from Libya that has come shortly before the arrival of additional crude from OPEC+ exporters this coming January.
Libya was not part of the OPEC+ output cuts strategy because of ongoing political unrest in the country which would have made any commitment unenforceable.
So it remains questionable if the global oil market can contain such an increase in supplies from these different sources.
Still, the return of Libyan oil remains fragile even if production can reach half of its earlier level of one million barrels per day. More likely is a gradual and faltering return.
The market has become somewhat inoculated to Libyan supply issues because of the ongoing political upheaval and conflict since 2011.
Libyan crude is a light sweet oil that is similar in specification to US shale. If it were more similar to the Arabian Gulf grades, the situation would be very different as this type of oil cannot be easily replaced.
Furthermore, because of copious US shale oil supplies, the West and North African crude oil market continues to struggle with the ripple effects of the Atlantic basin being oversupplied.