West Texas Intermediate futures for September delivery fell to $42.87 (-0.58%), while Brent crude declined to $48.67 (-0.29%) ahead of U.S. inventory report, which would help assess demand in the world's top oil consumer.

Global demand can't keep up with robust supply, especially amid slowing economic growth in world's second-biggest consumer China. The U.S. is also likely to enter the lower demand season in September.