More recently, a slowing demand outlook, especially in Asia but also Europe, has started dragging on prices.
Front-month U.S. West Texas Intermediate crude futures were trading at $37.18 per barrel at 0140 GMT, down 69 cents or 1.82 percent from their last settlement. Brent futures were down 47 cents, or 1.24 percent, to $37.32 a barrel.
Traders said the price falls were largely a result of a weak outlook for next year and the closing of 2015 trade books.
"The 2016 outlook is for lower prices, especially early next year. Many are closing their last long positions for the year today as nobody wants to come back in January and be surprised badly. Better start with a clean sheet," a trader said.
Forecasts that an upcoming cold weather in Europe will only be short-lived could also hurt crude prices.
U.S. crude and Brent had both rallied about 3 percent in the previous session on hopes that a drop in temperatures would buoy demand for oil for heating purposes.
But weather data in Thomson Reuters Eikon shows that average continental European temperatures are expected to drop from around 5 degrees Celsius currently toward and slightly below the seasonal norm of 2.4 degrees by Jan. 3 before rising to as high as 6-8 degrees by Jan. 7.
For most of the United States, a brief cold period is also not expected to last for much more than a week.
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