West Texas Intermediate futures for January delivery declined to $36.51 (-0.68%), while Brent crude fell to $39.46 (-0.68%) amid unfavorable fundamentals.

Market participants expect the current supply glut to continue in 2016 keeping prices under pressure and limiting gains. OPEC produces crude oil at record levels, while demand is relatively weak. In addition to this analysts note that demand might be traditionally lower in the next quarter.

Investors are also waiting for the Federal Reserve's meeting scheduled for next week. The central bank of the U.S. is likely to raise its interest rates for the first time in nearly a decade. This would boost the greenback making the dollar-denominated crude more expensive for customers using other currencies.