Budget 2016 fuel
Oil prices fell from their 2016 high on 21 MarchGetty

Oil prices kicked off the week on a downbeat note, with both benchmarks pulling back more than1% from the year high recorded over the past seven days as concerns over a global oversupply mounted again.

As of 8.39am GMT on Monday (21 March), Brent Crude was 1.23% lower to $40.70 (£28.27, €36.17) a barrel, while West Texas Intermediate declined 1.68% to $40.46 a barrel after data released by industry firm Baker Hughes on 18 March showed the US rigs count rose for the first time since December.

Over the past 12 months, the number of oil rigs in the US has declined 66% to reach lows last seen in 2009 and last week's increase, albeit minimal, was the first increment after 12 consecutive weeks of cuts.

"This [the increase] indicates market concerns are resurfacing about global oversupply, with the resilient US shale industry the swing producer," said Michael Van Dulken, head of research at Accendo Markets.

Earlier this year, crude prices fell to a 12-year low after declining 75% in 18 months, with Brent Crude and WTI falling to $27 and $26 a barrel respectively. However, the price of a gallon of oil in the US has increased by approximately 25 cents over the past four weeks and the price of US crude reached its highest level since December early on 18 March.

An increase in oil consumption in the US, coupled with declining output and news the Organization of the Petroleum Exporting Countries (Opec) intended to freeze production at January levels have all contributed to the recent recovery.