U.S. benchmark oil prices plunged below $40 per barrel in intraday trading Monday, touching levels not seen in more than three months and underscoring fears that the commodity's midyear rebound was not sustainable.

With global oil inventories remaining at elevated levels, West Texas Intermediate crude briefly fell below $40 before 1 p.m. and again later in the afternoon amid signs of increasing U.S. production and reduced geopolitical disruption.

The commodity hasn't closed below $40 since April 18, when it settled at $39.78.

Crude oil plummeted below $30 per barrel for about a week in February, tipping many energy companies into bankruptcy and triggering thousands of layoffs before a sharp recovery sent prices above $50 per barrel in May.

"When oil topped $50 this year, everyone thought that's the 'go' signal and we're just going to start adding rigs back and taking advantage of that," said Stewart Glickman, head of energy research for S&P Global Market Intelligence, in an interview.

But refiners, he said, are not demanding as much crude oil right now, creating the buildup in inventories that fuels concerns about a prolonged stretch of lower prices.

Eventually, oil producers will need to turn off the spigot to allow oil to rise. "Supply is what go us into this problem and supply is probably going to have to get us out," Glickman said.

The latest decline reflects a few key factors, analysts say: