Oil prices fell close to three-month lows on Wednesday after U.S. industry data showed weekly oil stocks declined by less than expected, feeding into concerns over persistent oversupply dragging down prices.

Global benchmark Brent crude was on track for the first monthly loss since January and the largest of 2016. Futures traded 51 cents down at $44.36 a barrel by 1145 London time.

U.S. West Texas Intermediate (WTI) crude was trading down 22 cents at $42.70 a barrel, close to a three-month low of $42.36 reached on Tuesday.

“Today’s weakness is just part of the general belief that the market is oversupplied,” said Tamas Varga, oil analyst at London brokerage PVM Oil Associates.

Weekly industry data from the American Petroleum Institute (API) late on Tuesday showed that U.S. crude stocks fell by 827,000 barrels in the week to July 22, well short of the 2.3 million barrel draw that had been expected. [API/S]

Closely watched U.S. government oil stocks data will be published at 1530 London time on Wednesday.

“Falling gasoline stocks and a renewed decline in U.S. oil production would contribute to stabilising oil prices,” said Carsten Fritsch, commodities analyst at Commerzbank.

A firmer dollar <.DXY> has also weighed on oil prices over recent weeks. A stronger U.S. currency makes dollar-denominated commodities such as oil more expensive to buy.

Other analysts said they expect prices to fall further in the short term as oversupply persists while demand growth stutters.

“My view is that oil prices will find a low between $39 and $42 per barrel over the coming weeks,” said Ric Spooner, chief market analyst at CMC Markets.

“After that, however, we are coming closer to seeing a balanced market again,” he added, saying that $50-$60 a barrel would represent such supply and demand balance.

Eldar Saetre, chief executive of Norwegian state oil producer Statoil , said he expects the market to fall into balance over the course of this year.

“We see clear signs that we are on our way to a balanced oil market,” he said.