This Monday U.S. crude prices settled significantly lower after briefly breaking below $40 a barrel for the first time since April, weighed by a survey showing output in OPEC reached record highs last month amid the biggest addition of U.S. oil rigs in two years. After OPEC failed to reach an agreement to curb oil production at their recent meeting, the market is still highly oversupplied, with no break in sight.

French bank Societe Generale said that the global oil market has shifted from massive oversupply to broadly balanced in the second half of this year and first half of next year. Analysts at the bank expect crude prices to bottom out in the high $30s and should not return to lows of $26-27 seen in the first quarter of this year.

“Demand growth remains lacklustre and has not made significant inroads to clear the inventory overhang for oil,” Barclays said.