The bear market in oil intensified overnight as traders became increasingly concerned about the health of the US economy at a time when crude is heading for a period of oversupply.

Brent crude dropped 4.6 per cent to $US77.06 a barrel, hitting its lowest level this year on Tuesday. West Texas Intermediate tumbled 4.4 per cent to $US71.49 a barrel, reaching a three-month low. Prices edged higher in early trade on Wednesday.