Oil prices tumble 3 percent to just over $30; traders bet on more falls

Crude oil fell 3 percent on Tuesday, heading toward $30 per barrel and levels not seen in over a decade, with analysts scrambling to cut their price forecasts and traders betting on further declines.

Prices are down around 20 percent since the start of the year, dragged lower by soaring oversupply, China's weakening economy and stock market turmoil, as well as the strong dollar, which makes it more expensive for countries using other currencies to buy oil.

International benchmark Brent crude futures LCOc1 dropped over 3 percent to a low of $30.43 per barrel on Tuesday, a level last seen in April 2004, before edging back to $30.69 by 0744 GMT (2.44 a.m. ET) , still down 86 cents from their last settlement.

U.S. crude West Texas Intermediate (WTI) CLc1 fell to a low of $30.41 per barrel, a level last seen in December 2003, before crawling back to $30.59 per barrel.

Trading data showed that managed short positions in WTI crude contracts, which would profit from a further fall in prices, are at a record high, implying that many traders expect further falls. 

Traders and analysts said ballooning oversupply and China's slowing economy were the main reasons for the oil price rout, which has pulled prices down by over 70 percent since mid-2014. They have also started to point at the dollar as a drag for crude.