“Oil prices will likely experience another short-term dip in the coming weeks,” Barclays predicted.

Others also believe the recent price recovery was not fueled by fundamental factors but more of a result to short-covering and speculation over potential production freezes among Organization of Petroleum Exporting Countries and other major producers.

“Positioning data seems to confirm our view that the latest oil bounce is more technical and positioning-oriented than fundamental. In fact, new buyers have been mostly absent the past few months,” Morgan Stanley said.

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Further pressuring the oil market, U.S. drillers added 10 oil rigs in the week ended August 19 during the rebound in crude prices.

In addition, Iraq plans to raise exports of Kirkuk crude by 150,000 barrels per day from northern fields after an outage since March. Meanwhile, Nigerian militant group was ready for a ceasefire and dialog with the government, which may diminish attacks on oil facilities in the Niger Delta and resume normal operations.

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United States Oil Fund